R purchases the following European Call option of Emkey Tech Ltd. and European Put option of Giganet Ltd. What decision he would take on expiry, if the share price of Emkey closes at ₹ 1100 and Giganet closes at ₹ 590 in

R has purchased European options, which means he can exercise them only on expiry. The decision to exercise an option depends on whether it is "in the money" at expiry, leading to a profit or avoiding a loss (ignoring premium for this problem). Given: Share price of Emkey at expiry (S_Emkey) = ₹ 1100 Share price of Giganet at expiry (S_Giganet) = ₹ 590 Decisions for Call Options (Right to Buy): A call option will be exercised if the spot price (S) is greater than the strike price (K), as the holder can buy at K and sell at S for a profit. Emkey: 1050 Call (Strike Price K = ₹ 1050) S_Emkey (₹ 1100) > K (₹ 1050) Decision: Exercise the option. Reason: R can buy Emkey shares at ₹ 1050 (strike price) and immediately sell them in the market at ₹ 1100, making a gain of ₹ 50 per share (₹ 1100 - ₹ 1050). Emkey: 1120 Call (Strike Price K = ₹ 1120) S_Emkey (₹ 1100) < K (₹ 1120) Decision: Do not exercise the option. Reason: R can buy Emkey shares cheaper in the open market at ₹ 1100 than exercising the option to buy at ₹ 1120. Exercising would result in a loss. Decisions for Put Options (Right to Sell): A put option will be exercised if the spot price (S) is less than the strike price (K), as the holder can buy at S and sell at K for a profit. Giganet: 525 Put (Strike Price K = ₹ 525) S_Giganet (₹ 590) > K (₹ 525) Decision: Do not exercise the option. Reason: R can sell Giganet shares at a higher price in the open market (₹ 590) than exercising the option to sell at ₹ 525. Exercising would result in a loss. Giganet: 580 Put (Strike Price K = ₹ 580) S_Giganet (₹ 590) > K (₹ 580) Decision: Do not exercise the option. Reason: R can sell Giganet shares at a higher price in the open market (₹ 590) than exercising the option to sell at ₹ 580. Exercising would result in a loss.