Chapter5: Currency Derivatives
Section: Chapter Questions
Problem 5ST
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Question
![Suppose you buy a Merck put for $2.50 which matures in September with a strike price of $50. Merck is currently trading at $51.75. If the
stock price of Merck falls to $46, the rate of return of your put option is:
60%
10%
120%
70%
O O O](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0171f51-5dd1-4696-829a-cc2af5876abf%2F8538f8c2-5594-44ef-af99-a6a16c7141fe%2Fae5dfoc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Suppose you buy a Merck put for $2.50 which matures in September with a strike price of $50. Merck is currently trading at $51.75. If the
stock price of Merck falls to $46, the rate of return of your put option is:
60%
10%
120%
70%
O O O
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