The option contracts are given below; you are required to compute profit or loss to each investor : (ii) Narain buys a put option at an exercise price of ₹78 for a premium of ₹7 per share. The share price falls to ₹66 by

Analysis for Narain (Buyer of Put Option): Exercise Price (Strike Price) = ₹78 Premium Paid = ₹7 per share Share Price at Expiry = ₹66 Since the share price at expiry (₹66) is lower than the exercise price (₹78), Narain, as the buyer of the put option, will exercise the option. This means Narain can sell the share at ₹78, which is higher than its current market price of ₹66. Calculation of Profit/Loss for Narain: Particulars Amount (₹) Gross Payoff from exercising option (Exercise Price - Market Price) ₹78 - ₹66 = +12 Premium Paid -7 Net Payoff (Profit) +5 Hence, Narain, the buyer of the put option, will have a profit of ₹5 per share .