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Draw a payoff diagram showing the value

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Reference no: EM132663736

You own a put option on Ford stock with a strike price of $10. The option will expire in exactly six? months' time.

Problem a. If the stock is trading at $9 in six? months, what will be the payoff of the? put?

Problem b. If the stock is trading at $25 in six? months, what will be the payoff of the? put?

Problem c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration.

Reference no: EM132663736

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