Question: Problem 10-10 (LG 10-4) You have written a put option on Diebold Incorporated common stock. The option has an exercise price of $32 and Diebold's

 Problem 10-10 (LG 10-4) You have written a put option on

Problem 10-10 (LG 10-4) You have written a put option on Diebold Incorporated common stock. The option has an exercise price of $32 and Diebold's stock currently trades at $34.50. The option premium is $0.95 per contract. a. What is your net profit if Diebold's stock price increases to $36 and stays there until the option expires? b. What is your net profit on the option if Diebold's stock price decreases to $29 at expiration of the option and the option holder exercises the option? (For all requirements, negative amounts should be indicated by a minus sign. Round your answers to 2 decimal places. (e.g., 32.16)) Net profit Net profit per share per share b

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!