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Suppose your portfolio mirrors S&P500 index and is valued currently at $1,000,000. The S&P 500 index is currently at 2,000. What action is needed to provide protection against the value of the portfolio falling below $950,000 in 6 months?

A) Buy 1,000 6-month S&P500 put options with strike price of 1800.

B) Buy 1,000 6-month S&P500 put options with strike price of 1900.

C) Buy 500 6-month S&P500 put options with strike price of 1800.

D) Buy 500 6-month S&P500 put options with strike price of 1900.

Please explain why?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91619713

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