### Explain how hedge has provided protection-transaction costs

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Alan just bought 100 shares of Global, Inc. (GLO) at \$45 per share and as protection he also bought a three-month put with a \$45 strike price at a cost of \$400. One of two scenarios is expected to occur in the next three months: (a) GLO stock declines to \$33; and (b) GLO stock rises to \$61. Calculate the profit or loss under each scenario and explain how the hedge has provided protection for Alan's position in GLO. Ignore transaction costs.

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