Question: A B C D E F G H I J A trader has a put option contract to sell 100 shares of a stock for

A B C D E F G H I J A

A B C D E F G H I J A trader has a put option contract to sell 100 shares of a stock for a strike price of $350. What is the effect on the terms of the contract if: a) a $7.5 cash dividend has been paid b) 7-for-2 stock split has occured c) 8% stock dividend has been paid. N K 100 $350 a) a $7.5 cash dividend has been paid Cash dividend $7.50 Knew Nnew 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 b) 7-for-2 stock split has occurred n 7 2 m Knew Nnew c) 8% stock dividend has been paid. Stock dividend 8% n m m Knew Nnew

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