Company stock price actually drops

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You expect Tundra Company's stock price to decline from its current price of $52.50 in the next 3 months. For $2.80 you could buy a 3-month put option giving you the right to sell 1 share at a price of $55 per share. If you buy this option for $2.80 and the company's stock price actually drops to $40, what would your pre-tax net profit be? -$17.80 -$2.80 $12.20 $15.00 None of the above.

Reference no: EM131517389

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