The stock price of BAC is currently $150 and a put option with strike price of $150

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The stock price of BAC is currently $150 and a put option with strike price of $150 is $10. A trader goes long 300 shares of BAC stock and long 3 contracts of the put options with strike price of $150.

a. What is the maximum potential loss for the trader?

b. When the stock price is $161 on the expiration, what is the trader's net profit?

Related Book For answer-question

Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

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Posted Date: Jul 15, 2023 02:17 AM

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The stock price of BAC is currently $150 and a put option with strike price of $150

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a To determine the maximum potential loss for the trader we need to consider the combined loss from ... View the full answer

Introduction to Corporate Finance What Companies Do

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