# Construct a table of the investors profit (loss) given the following stock prices at expiration: \$10, 15, 20, 25, 30, 35, 40, 45, 50.

05 / 03 / 2018 Assignment

This paper circulates around the core theme of Construct a table of the investors profit (loss) given the following stock prices at expiration: \$10, 15, 20, 25, 30, 35, 40, 45, 50. together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 45. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

Question 1

a.Construct a table of the investors profit (loss) given the following stock prices at
expiration: \$10, 15, 20, 25, 30, 35, 40, 45, 50.

exercise

\$2.00
\$30.00

\$45.00
\$13.00

\$50.00
\$18.00

\$45.00
\$(2.00)

\$50.00
\$(2.00)

Stock Price
profit or Loss

\$10.00
\$(2.00)

\$15.00
\$(2.00)

\$20.00
\$(2.00)

\$25.00
\$(2.00)

\$30.00
\$(2.00)

\$35.00
\$3.00

\$40.00
\$8.00

b. Now construct a table assuming the option had been a put option instead of a call
option.

Stock Price
profit or Loss

\$10.00
\$18.00

\$15.00
\$13.00

\$20.00
\$8.00

\$25.00
\$3.00

\$30.00
\$(2.00)

\$35.00
\$(2.00)

\$40.00
\$(2.00)

c. Graph the profit/loss schedules in parts (a) and (b). Indicate at what stock
prices the investor would breakeven with both the call and put options.

Breackeven-Call&Put Opt ions

Row 6

Row 12

d. If the investor had purchased both the call and the put, what type of strategy would they
be using?

The type of strategy when investor purchasing a combination of a call and a put, each with
the same exercise price and expiration date called " Straddle"

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