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Business, 11.05.2021 17:30 olsen6932

Dorothy Santosuosso does a lot of investing in the stock market and is a frequent user of​ stock-index options. She is convinced that the market is about to undergo a broad retreat and has decided to buy a put option on the​ S&P 100 Index. The put carries a strike price of and is quoted in the financial press at . Although the​ S&P Index of 100 stocks is currently at ​, Dorothy thinks it will drop to by the expiration date on the option. How much profit will she​ make, and what will be her holding period return if she is​ right? How much will she lose if the​ S&P 100 goes up​ (rather than​ down) by points and reaches by the date of​ expiration?

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