Suppose your wealthy Aunt Minnie has asked you to manage her large share portfolio.You would like to buy and/or sell options on many of the shares she owns.Describe the types of options you would buy or sell, as well as your rationale, given the following circumstances: a.Aunt Minnie owns 10,000 shares of IBM common share.You believe it is going to fall in price, but she won't let you sell it because her late husband told her never to let it go.How do you protect her from the impending price decline? b.Your analysis suggests that the common share of Jet-Electro is poised to increase in value sharply over the next year.Aunt Minnie doesn't want to buy any of the shares, but does want you to use options to proﬁt if the price rises.What do you do? c.Although Aunt Minnie doesn't want you to sell any of the shares she owns, she would like you to use options to generate a little extra income.How might you do this?

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The Answer of Suppose your wealthy Aunt Minnie has asked you to manage her large share portfolio.You would like to buy and/or sell options on many of the shares she owns.Describe the types of options you would buy or sell, as well as your rationale, given the following circumstances: a.Aunt Minnie owns 10,000 shares of IBM common share.You believe it is going to fall in price, but she won't let you sell it because her late husband told her never to let it go.How do you protect her from the impending price decline? b.Your analysis suggests that the common share of Jet-Electro is poised to increase in value sharply over the next year.Aunt Minnie doesn't want to buy any of the shares, but does want you to use options to proﬁt if the price rises.What do you do? c.Although Aunt Minnie doesn't want you to sell any of the shares she owns, she would like you to use options to generate a little extra income.How might you do this?

Suppose Your Wealthy Aunt Minnie Has Asked You to Manage