Question: You are long a protective put (long stock, long put) on Microsoft with a strike price X = 80. What is your payoff at expiration

You are long a protective put (long stock, long put) on Microsoft with a strike price X = 80. What is your payoff at expiration if the price of Microsoft at expiration is ST = 65?

a. $80

b. $-15

c. $65

d. $0

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!

Flu cases per school this past flu season in the Remulak school system *(n = 500) were 15 per week. For the entire state, the weekly average was 16, and the standard deviation was 15.1. Are the kids...

Finance problem thx! You are long a protective put (long stock, long put) on Microsoft with a strike price X = 80. What is your payoff at expiration if the price of Microsoft at expiration is ST =...

Need help with the 70 multiple choice questions for final exam - if you can, please provide explanation for harder questions. A s ae o . s h r d n. . Surname: ______________________ Q1 Given names:...

Help me to solve the following |Consider a market for a homogenous product with four active companies. Firms have a constant marginal cost of production of 510. The market demand is given by Dial = W...

Mean, Variance and Risk-adjusted Returns of Stock and Option Positions. Consider a non-dividend-paying stock and consider the following portfolios - long 1 stock (unhedged long stock position) - long...

You have the following information today! The spot market value of the S&P 500 index today is 5o = 4,381. Put options on the S&P 500 index with a strike price of K - 4375 and 12 months to expiration...

Hi I need Q 5 to Q 8 ASAP please I need it within the next 12 hours. Prof. PIRIM Fall 2016 Advanced Investment (BusFin 4229 ) Problem Set 2: Call and Put Option Contract This problem set is due at...

T/F The constant-growth dividend discount model (DDM) can be used only when the growth rate is less than or equal to the cost of equity. True False The term random walk is used in investments to...

Help, Don't give answers without showing all the calculations 65. Assume that a single stock is the underlying asset for a forward contract, a K-strike call option, and a K-strike put option. Assume...

Can you answer question 2 & 4 for me please, I've attached the problem set. Prof. PIRIM Spring 2016, Session II Options and Futures I (BusFin 4230 ) Problem Set 2: Call and Put Option Contract This...

Please answer 7 Plot the payoff of the portfolio at the expiration date of the options. Which option must cost more and why? Make your argument using no-arbitrage reasoning. On the same graph, plot...

Given the function f(x) = 240x48 (a) cam File her sore graph f(x) with the shaded region bounded by the graph of f(x), the x-axis, and the vertical lines x = 0 and x = 1. Include the Microsoft Excel...

How is a job analysis used in the process of job evaluation?

Calculate the net profit. Craftline Ltd reported total sales for the year of $3,260,000. The cost price of goods sold was $2,180,000. Listed below are the overheads incurred during the year....

An analyst uses a two-stage variable growth model to estimate the value of Old Maid Company's common stock. The most recent annual dividend paid by the company was $3 per share. The analyst expects...