What is the total gain or loss of romero strategy

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Reference no: EM131592125

Joaquin Romero, CFA, gathered financial information concerning the common stock of Carter Company and a put option on the same stock. The market value of Carter Company stock is currently at $47.50, while a put option on a Carter Company stock is selling at $10 with an exercise price of $55.00. After doing so, he decides to implement a protective put strategy for 1,000 stocks. If the spot price of a Carter Company stock on the date of expiration of the put option is $46, what is the total gain or loss of Romero’s strategy?

Reference no: EM131592125

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