Calculate your net profit on the option

Reference no: EM132063568

Question: You have purchased a put option on Kimberly Clark common stock. The option has an exercise price of $85 and Kimberly Clark's stock currently trades at $86.18. The option premium is $1.38 per contract. Assume that 100 shares are traded.

a. Calculate your net profit on the option if Kimberly Clark's stock price falls to $83 and you exercise the option. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations.) Net profit $

b. Calculate your net profit on the option if Kimberly Clark's stock price does not change over the life of the option. (Negative amount should be indicated by a minus sign.) Net profit $

Reference no: EM132063568

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