d) You own a put option on a Brambles share with an exercise price of $12....
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d) You own a put option on a Brambles share with an exercise price of $12. The option will expire in exactly six months' time. i) If the share is trading at $9 in six months, what will be the payoff of the put? (1 mark) ii) If the share is trading at $18 in six months, what will be the payoff of the put? (1 mark) iii) Assuming that the option costs $0.50, draw a profit diagram showing the profit of the put as a function of the share price at expiration. (2 marks) d) You own a put option on a Brambles share with an exercise price of $12. The option will expire in exactly six months' time. i) If the share is trading at $9 in six months, what will be the payoff of the put? (1 mark) ii) If the share is trading at $18 in six months, what will be the payoff of the put? (1 mark) iii) Assuming that the option costs $0.50, draw a profit diagram showing the profit of the put as a function of the share price at expiration. (2 marks)
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