Put option on kimberly clark common stock

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Reference no: EM131887045

You have purchased a put option on Kimberly Clark common stock. The option has an exercise price of $75 and Kimberly Clark’s stock currently trades at $76.18. The option premium is $1.50 per contract. Assume that 100 shares are traded.

a. Calculate your net profit on the option if Kimberly Clark’s stock price falls to $73 and you exercise the option. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations.)

Net profit $

b. Calculate your net profit on the option if Kimberly Clark’s stock price does not change over the life of the option. (Negative amount should be indicated by a minus sign.)

Net profit $

Reference no: EM131887045

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