Question: Question B2 (b) Suppose David purchases five put option contracts on Netfix. Each contract is able to exercise for 100 shares. The strike price and

Question B2

(b) Suppose David purchases five put option contracts on Netfix. Each contract is able to exercise for 100 shares. The strike price and the premium are $46 and $3 for each share respectively. If at expiration, the stock is selling for $34 per share. Determine the payoff his position worth and return on investment (in percentage) of the five put option contracts. (7 marks)

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