Imagine you purchased $100$ shares of Company ABC$$s stock at the price of $$75/$share$.$ You

are concerned about a potential decline in ABC stock price, but you do not want to abandon

your position in ABC stock now and would like to sell it after $6$ months.

You decide to use a put option, which gives you the right $($not the obligation$)$ to sell the

underlying financial product at a given price, to hedge the potential risk. You pay $$100$ for

a put option that covers $100$ shares of ABC stock, with a strike price of $$72/$share$.$ The put

option will expire after $6$ months.

i$.$ If the price of ABC stock reduces to $ $$65/$share after $6$ months, how your losses

would be mitigated?

ii$.$ If the price of ABC stock increases to $$80/$share$,$ what should you do$?$