Section C (4 Mark)
Mr. XYZ is bullish about ABC Ltd stock. He buys ABC Ltd. at current market price of Rs. 4000 on 4th July. To protect against fall in the price of ABC Ltd. (his risk), he buys an ABC Ltd. Put option with a strike price Rs. 3900 (OTM) at a premium of Rs. 143.80 expiring on 31st July.
What would be the Net Payoff of the Strategy?
• If ABC Ltd closes at 3458
• If ABC Ltd closes at 4352
Submit