Label the following for this diagram:a. Name of options payoffb. Identify whether positive or negative premiumc. Identify breakeven pointd. What is the profit or loss when stock price is S60 at maturitye. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity?Option Payoffs and Profits Long put$40$20$0Option PayoffOption ProfitExerche Price$20S40$20$40S60$80.Stock Price At MaturityPayoff and Profit

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a. Name of options payoff b. identify whether positive or negative premium c. identify breakeven point

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

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Question

Label the following for this diagram:
a. Name of options payoff
b. Identify whether positive or negative premium
c. Identify breakeven point
d. What is the profit or loss when stock price is S60 at maturity
e. Suppose you have this options position, should you exercise your right (if any) assuming that the stock price is $60 at maturity?
Option Payoffs and Profits Long put
$40
$20
$0
Option Payoff
Option Profit
Exerche Price
$20
S40
$20
$40
S60
$80.
Stock Price At Maturity
Payoff and Profit

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