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You have shorted a put option on Ford stock with a strike price of $13. When you sold (wrote) the put, you received $5. The option will expire in exactly six months' time. a. If the stock is trading at $8 in six months, what will your payoff be? What will your profit be? b. If the stock is trading at $24 in six months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration. d. Redoc, but instead of showing payoffs, show profits. a. The payoff of the short is $ (Round to the nearest dollar.) and the profit of the short is $

You have shorted a put option on Ford stock with a strike price of $13. When you sold (wrote) the put, you received $5. The option will expire in exactly six months' time. a. If the stock is trading at $8 in six months, what will your payoff be? What will your profit be? b. If the stock is trading at $24 in six months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration. d. Redoc, but instead of showing payoffs, show profits. a. The payoff of the short is $ (Round to the nearest dollar.) and the profit of the short is $

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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solve a,b,c and d please. round to nearest dollar

You have shorted a put option on Ford stock with a strike price of $13. When you sold (wrote) the put, you received $5. The option will expire in exactly six months' time. a. If the stock is trading at $8 in six months, what will your payoff be? What will your profit be? b. If the stock is trading at $24 in six months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. a. The payoff of the short is $ (Round to the nearest dollar.) and the profit of the short is $
Transcribed Image Text:You have shorted a put option on Ford stock with a strike price of $13. When you sold (wrote) the put, you received $5. The option will expire in exactly six months' time. a. If the stock is trading at $8 in six months, what will your payoff be? What will your profit be? b. If the stock is trading at $24 in six months, what will your payoff be? What will your profit be? c. Draw a payoff diagram showing the value of the put at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. a. The payoff of the short is $ (Round to the nearest dollar.) and the profit of the short is $
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