A hedge fund manager shorted 800 shares of XYZ stock at$65/share and she plans to close out her short position in ninemonths. She decides to put options to fully hedge her short saleagainst price risk. 9-month XYZ put options have a strike price andpremium of $60 and $.15, respectively. Find her total profit/loss(stock and options combined) if XYZ sells for $59 when the optionsexpire.
Find the manager's total profit/loss (shares and optionscombined) if the stock trades for $72 when the options expire.
