Problem:
Suppose you believe that Sony's stock price is going to decline from its current level of $82.50 sometime during the next 5 months. For $363.00 you could buy a 5-month put option giving you the right to sell 60 shares at a price of $85 per share.
Required:
Question: If you bought this option for $363.00 and Sony's stock price actually dropped to $57, what would your pre-tax net profit be?
Note: Explain in detail.