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Behaving rationally on the decision to exercise the option

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Reference no: EM132042348

How do you calculate this question: Suppose you believe that Du Pont's stock price is going to decline from its current level of $ 83.56 sometime during the next 5 months. For $ 333.80 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $ 79 per share. If you bought a 100-share contract for $ 333.80 and Du Pont's stock price actually changed to $ 82.84 at the end of five months, your net profit (or loss) after behaving rationally on the decision to exercise the option would be ______? Show your answer to the nearest .01.

Reference no: EM132042348

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