What is the profit per share for an investor who has purchased a share of stock and two put options with an exercise price of $40,given that the purchase price of the stock was $42,each put cost $2 per share,and the stock was valued at $30 at expiration?

Question

Quizplus · Accepted Answer

The investor loses $12 on the stock ($42 purchase price - $30 expiration value) but gains $8 from the two put options (($40 exercise price - $30 expiration value) x 2 puts), resulting in a net profit of $4.

What Is the Profit Per Share for an Investor Who