Calculate net profit on the option contract

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You have purchased a put option on Peter Clark common stock. The option has an exercise price of $38.00 and Kimberly Clark's stock currently trades at $35. The option premium is $2 per share.

a. Calculate your net profit on the option contract if Kimberly Clark's stock price falls to $30.00 and you exercise the option.

b. Calculate your net profit on the option contract if Peter Clark's stock price does not change over the life of the option.

Reference no: EM132412434

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