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A Put Is the Option to Sell Stock at $35

question 21

Essay

A put is the option to sell stock at $35. The price of the stock is $34, and the price of the put is $2.
a. What is the intrinsic value of the put?
b. What is the time premium paid for the put?
c. What is the percentage return from purchasing the put if at the expiration of the put the price of the stock is $31?


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