Question: Question 7 (5 marks) You have bought Thames put options with an exercise price of $3.80. At the time of purchase the share price was

Question 7 (5 marks) You have bought Thames put options with an exercise price of $3.80. At the time of purchase the share price was $3.95 and you paid $0.26 for the option. a) Is the option in the money or out of the money? (1 mark) b) If the share price is $3.58 at the expiry of the option, what is the gain or loss from the option position? Why has this outcome happened? (4 marks)

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