Suppose your portfolio mirrors S&P500 index and is valued currently at $2,000,00
ID: 2720773 • Letter: S
Question
Suppose your portfolio mirrors S&P500 index and is valued currently at $2,000,000. The S&P 500 index is currently at 2,000. What action is needed to provide protection against the value of the portfolio falling below $1,900,000 in 6 months?
a. Buy 1,000 6-month S&P500 put options with strike price of 1800.
b. Buy 500 6-month S&P500 put options with strike pice of 1800.
c. Buy 1,000 6-month S&P500 put options with strike price of 1900.
d. Buy 500 6-mont S&P500 put options with stike price of 1900
Explanation / Answer
c. Buy 1,000 6-month S&P500 put options with strike price of 1900
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