Business, 30.07.2021 02:20 Ghhkgu5120

Peter holds a European put on Nike stock with a strike price of $100 that expires in 1 year. Suppose that the price of Nike stock in 1 year is $70 and that Peter will make the exercise decision optimally. Which of the following statements is correct? A. Peter will choose to exercise in 1 year and will receive a payoff in 1 year of $70 from holding the option.
B. Peter will choose to exercise in 1 year and will receive a payoff in 1 year of $30 from holding the option.
C. Peter will choose not to exercise in 1 year and will receive a payoff in 1 year of $30 from holding the option.
D. Peter will choose not to exercise in 1 year and will receive a payoff in 1 year of $0 from holding the option.
E. There is not enough information to determine whether Peter will exercise the put option, or what his payoff will be in 1 year from holding the put option.

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Peter holds a European put on Nike stock with a strike price of $100 that expires in 1 year. Suppose...

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