What will be the payoff of the put

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Reference no: EM13976467

You own a put option on Ford Stock with a strike price of $10. The opti?on will expire in exactly six months time.

a. If the stock is trading at $8 in 6 months, what will be the payoff of the put?

b. If the stock is trading at $23 in 6 months, what will be the payoff of the put?

c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration.

Reference no: EM13976467

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