Suppose that a June put option to sell a share for $60 costs $4 and is held until June
Chapter 1, Problem 1.14(choose chapter or problem)
Suppose that a June put option to sell a share for $60 costs $4 and is held until June. Under what circumstances will the seller of the option (i.e., the party with the short position) make a profit? Under what circumstances will the option be exercised? Draw a diagram illustrating how the profit from a short position in the option depends on the stock price at maturity of the option.
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