Question: 3. [16 Marks] [Options Contracts] Answer all parts (a) to (c) of this question Assume that put options on the shares of Orion Plc have

3. [16 Marks] [Options Contracts] Answer all parts (a) to (c) of this question Assume that put options on the shares of Orion Plc have an Exercise Price of E= 450p per share and expire on 30 September 2020. Suppose that an investor buys put options on 1000 shares paying a premium (put option price) of 25peach. (a) Explain howtoobtain the investor's payoffat expiry foreach of the following ranges of Orion's share price and illustrate in a diagram for 1 put option. (i) Share price ST >450 p; (ii) Share price ST= 450p; (iii) 250p

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