We buy a put option its premium is 4 and the strike price


We buy a put option. Its premium is $4 and the strike price is $44. The current market price is $50. If the price drops to $35, shall we exercise the put option? If not, why not, and If yes, why yes? Assume that we buy the stock at $30. Compare the two cases of owning the stock versus not owning it in terms of rate of return the investor makes.

Request for Solution File

Ask an Expert for Answer!!
Financial Management: We buy a put option its premium is 4 and the strike price
Reference No:- TGS01036923

Expected delivery within 24 Hours