The Spot Price of the Market Index Is $900

Essay

The spot price of the market index is $900.After 3 months the market index is priced at $920.The annual rate of interest on treasuries is 4.8% (0.4% per month).The premium on the long put,with an exercise price of $930,is $8.00.Draw the payoff graph for the long put position at expiration.Include strike price,breakeven price,and max loss.