Question

5) (4 pts) Alan just bought 100 shares of Global, Inc. (GLO) at $48 per share and as protection he also bought a three-month put with a $45 strike price at a cost of $250. IF GLO stock unexpectedly declines to $33 calculate the total profit or loss and explain how the hedge has provided protection for Alan's position in GLO. Ignore transaction costs. Strick: 니S Total profit or Loss = Explain how hedge provided protection: wehare l7 s hareo tection with 4s strick 25

Answer 1

toss in value Mkt value ( 33) (5650) 48 33)xloo Bereue of kedae holustion Net Gairr $1200-250 has com e doisn by呻950 due to dhe loss