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Construct a hedge using an equal number of put options

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Dale buys 1,000 shares at a price of $8.47 and decides to construct a hedge using an equal number of put options, with an exercise price of $8.75 and a cost of 40c per option. If ignoring the time difference between the purchase or sale of the option and its expiry: i) What would be the profit for the expiry share-prices of $8.25 and $9.00?

Reference no: EM132507737

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