overvalued

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    What does it mean when put option is undervalued and overvalued?

    I am studying p1, t1, Stulz's governance chapter and I really do not understand the part below. What is put option's undervalue and overvalue have to do with NPV? I appreciate your help. Thank you! "A trading desk’s writing of underpriced, deep-out-of-the-money puts based on traders’...
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