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Business, 02.12.2019 19:00

Now let’s say you believe lmn stock will decrease in price of $50/share, so you decide to purchase a june put option for 100 shares for a 30 day time limit. assume that buy 1 option contract, where 1 put option contract equals to 100 shares and the put premium cost per share is $4/share. (6 points total) a) are you the long call or short put option? are you the buyer or seller?
b) how much will you spend for the entire put option contract? assume the price of the share increased to $56 per share,
c) would you exercise the put option?
d) how much would be your gain or loss? assume the price of the share decreased to $40 per share,
e) would you exercise the put option?
f) how much would be your gain or loss?

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