How could you use a collar to reduce your risk of loss from


You received stock options that you recently exercised. You cannot legally sell the stock for the next six months. The stock is selling for $38.25. A call to buy stock at $40 is $3.38 and a put to sell the stock at $35 is $1.94.

How could you use a collar to reduce your risk of loss from a decline in the price of the stock? Verify that the collar does achieve its objective

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Financial Management: How could you use a collar to reduce your risk of loss from
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