Harry buys 1,000 ANZ shares at a price of $8.47 and decides to construct a hedge using

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Harry buys 1,000 ANZ shares at a price of $8.47 and decides to construct a hedge using an equal number of put options, with an exercise price of $8.75 and a cost of 40c per option.Ignoring the time difference between the purchase or sale of the option and its expiry:

i)What would be the correct diagram that shows the expiry profit as a function of share-price, from the hedged position?

ii) What is the profit for the expiry share-prices of $8.25 and $9.00?

Posted Date: May 18, 2024 06:04 PM

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Harry buys 1,000 ANZ shares at a price of $8.47 and decides to construct a hedge using

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