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You buy the stock at a price of $33 and at the same time you buy a put option with an exercise price of S30, paying a premium of S 2. 5. (15 points) What is your total cost at the beginning for buying both the stock and the put option? Consider this as your total wealth. a. b. If the stock price falls to $20 and you exercise the put, what would be your final wealth i this example? c. What is your maximum total loss in dollars if the stock price falls to $20 in the market?
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