You would like to buy a share of stock of Honkers Corp, currently trading at $50....

You would like to buy a share of stock of Honkers Corp, currently trading at $50. However, you are concerned that the value of this stock may decline. You notice an at-the-money put option on this stock trading at $4.

Design a protective put strategy. Please fill out the following table.

Stock price on the expiration day	S = 30	S = 40	S = 50	S = 60	S = 70
Stock value at expiration
Put value at expiration
Total value of the hedged position

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jeff jeffy answered 1 year ago

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