Investor maximum possible gain and maximum loss, Finance Basics

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Investor maximum possible gain and maximum loss

An investor believes that XYZ stock will decline in the upcoming 6 months and as such buys one put option at a strike price of $40. The stock is currently trading at $42 a share. The investor pays $3 a share for the premium. What is the investor's maximum possible gain and maximum loss? What is the maximum gain and loss for the writer of the put?

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Finance Basics: Investor maximum possible gain and maximum loss

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Request for Solution File

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Finance Basics: Investor maximum possible gain and maximum loss

Reference No:- TGS052223

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Net profit and cash flow from the sale for the year

Q : Unlevered beta of ang enterprises

Q : Calculating discount rate-capm

Q : Statement of change in stockholders equity

Q : Investor maximum possible gain and maximum loss

Q : Firm paid in full for the merchandise

Q : Value of the investment-price of a share of stock

Q : Average tax rate of a corporation

Q : Net fixed asset investment

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Investor maximum possible gain and maximum loss

Reference No:- TGS052223

Recent Questions Asked Finance Basics

Q : Net profit and cash flow from the sale for the year

Q : Unlevered beta of ang enterprises

Q : Calculating discount rate-capm

Q : Statement of change in stockholders equity

Q : Investor maximum possible gain and maximum loss

Q : Firm paid in full for the merchandise

Q : Value of the investment-price of a share of stock

Q : Average tax rate of a corporation

Q : Net fixed asset investment

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