Reference no: EM132861439

Question 1: Short seller activity in GameStop increased demand for put options. Jill decided to write 1,000 in-the-money put options with an exercise price of $7.00 for $1.90 each and covered this position by short selling 1000 shares at the market price of $6.00. Calculate her profit (per share) for the short share position, the short put position, and the hedged position if:

i) Short sellers drove the price of GameStop shares to $5.00
ii) Investors executed a short squeeze and drove the price to $380.