Question: A put and a call have the following terms: The price of the stock is currently $29. You sell the stock short. Illustrate how to

A put and a call have the following terms:

The price of the stock is currently $29. You sell the stock short. Illustrate how to use the call or the put to reduce your risk exposure.
a) What is the maximum possible profit on the position?
b) What is the maximum possible loss on the position?
c) What range of stock prices generates a profit?
d) What advantage does this positionoffer?

Call: strike price term price $30 three months $3 $30 three months $4 Put strike price term price

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