A stock trades for shs. 120. A put on this stock has an exercise price of shs. 140 and is about to expire. The put trades for shs. 22. How would you respond to this set of prices? Explain

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter5: Financial Options
Section: Chapter Questions
Problem 3Q
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A stock trades for shs. 120. A put on this stock has an exercise price of shs. 140 and is about to expire. The put trades for shs. 22. How would you respond to this set of prices? Explain

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