What is your dollar profit and percentage return

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Reference no: EM131184984

You can buy a 6-month put contract (i.e., for 100 shares) with an exercise price of $50 for a cost of $4.15 * 100. Assume the risk-free rate is 0%.

a. What is your dollar profit (loss) and percentage return if you purchase one put contract, and in 6 months the underlying stock is selling for $40?

b. What is your dollar profit (loss) and percentage return if you purchase one put contract, and in 6 months the underlying stock is selling for $45?

c. What is your dollar profit (loss) and percentage return if you buy one put contract, and in 6 months the underlying stock is selling for $50?

Reference no: EM131184984

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