Illustrate the profit/loss profile of the writer and buyer

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Question

a) What is a superannuation fund?

b) If a superannuation fund is invested in the shares of Bank A whose shares trade at USD 16.75 a share, and the fund has purchased put options on these shares at a premium of USD 0.80 with an exercise price of USD 15 per share, when will the fund exercise its put options?

c) Illustrate the profit/loss profile of the writer and buyer of the put option along with the breakeven price on a chart

Reference no: EM133264552

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