An investor buys a put option with a strike price of 72 how


The current price of a non-dividend-paying stock is $70. Over the next six months it is expected to rise to $80 or fall to $62. Assume the risk free rate is zero. An investor buys a put option with a strike price of $72. How would the investor hedge the put option position? Assume that the option is written on 100 shares of stock.

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Financial Management: An investor buys a put option with a strike price of 72 how
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