(Answered) Suppose you believe that du ponts stock price is going to

Statistics

Suppose you believe that Du Pont's stock price is going to decline from its current level of $82 sometime during the next 5 months. For $5.25 you could buy a 5-month put option giving you the right to sell shares at a price of $85 per share. If Du Pont's stock price actually dropped to $79, what would be your net profit or loss (after transactions costs but before taxes)?

a. Lost $1.25

b. Made $.75

c. Made$1.75

d. Made $3

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