Put option is currently worth

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Reference no: EM13918120

A put option is currently worth $10. Just one second later, the stock price decreased by $5 to $45. The absolute value of the put option delta is 1/2. a. Approximately, what would the new put option be? b. using the original stock price of $50, and an appropriate amount of shares to buy/short, how much would you have to borrow or lend to replicate the put option? Be sure to indicate whether you are borrowing or lending.

Reference no: EM13918120

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Put option is currently worth : A put option is currently worth $10. Just one second later, the stock price decreased by $5 to $45. The absolute value of the put option delta is 1/2. a. Approximately, what would the new put option be? b. using the original stock price of $50, and a..

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