Wasteoftime

ADISON2000 Wrote:
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> Thanks to all you great guys that contributed to
> the questions but the suggestions to the second
> question are still not very convincing. First,
> like nevcfa1 earlier pointed out, the put I
> suppose is worthless as the price at expiration is
> higher than the exercise price. I tend to agree
> with nevcfa1 that the investor has profit from the
> purchase of the asset but then the next issue is
> how does the $14 profit from the asset translate
> to the price of the put?

Because it says "breakeven", which means profit from one asset = loss on the other.

> ANS rightly observed that the break even point is
> X-p but the put should be worthless given that the
> price at expiration is higher than the exercise
> price. Any further take on this?

As ANS points out, the questions says "IF".

Also ek82 is right, I missed the part about the investor being short. As for whether I am a he or a she, he is definitely right.

NC