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1. A put option has a strike price of $4.78 and a premium of $0.01. At expiration, the price of the underlying is $4.81. What
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Answer #1

Break-even price = Strike price + Option premium cost + Commission and transaction costs

= $4.78 + $0.01 = $4.79

Profit = MAX ( strike price – underlying price , 0)

= MAX [($4.78 - $4.81), 0] = $0

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