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Exercise prices to choose from

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Reference no: EM131970761

You want to hedge against your stock portfolio value declining more than 8% next month. Currently, the S&P 500 is standing at 2,000 and your portfolio has a beta of 0.8. To achieve this goal, the best strategy is protective put using S&P 500 index put option. In other words, you need to buy S&P 500 put options but there are many different exercise prices to choose from.

Find the right exercise price for S&P 500 put option.

  • 1850
  • 1800
  • 1900
  • 1950

Reference no: EM131970761

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