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What is Purdue net gain or loss after accounting

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Problem - Purdue Savings and Loan Association purchased a put option on Treasury bond futures with a September delivery date and an exercise price of 91-16. The put option has a premium of 1-32. Assume that the price of the Treasury bond futures decreases to 88-16. Should Purdue exercise the option or should it let the option expire? What is Purdue's net gain or loss after accounting for the premium paid on the option?

Reference no: EM132915316

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