Assume that you have shorted the put option in Problem 4. a. If the stock is trading
Question:
Assume that you have shorted the put option in Problem 4.
a. If the stock is trading at $2 in three months, what will you owe?
b. If the stock is trading at $21 in three months, what will you owe?
c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration.
Data From Problem 4:
You own a put option on Ford stock with a strike price of $8. The option will expire in exactly six months.
Step by Step Answer:
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9781292437156
5th Global Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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