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Unformatted text preview: Exercise 3: You want to purchase 2 puts and 1 call. The call option costs $5 and the put option costs $6. The exercise price for the call or the put is $50. Plot the prot against the stock price at the expiration date: a. For the 2 puts. b. For the call. c. For the combination of the 2 puts and 1 call. Exercise 4: Consider the following strategy: You write 2 call options (each one with E = $45 ,C = $5) and you buy 1 call option (with E = $40 ,C = $8). Both buying and selling call options have the same expiration date. Plot the prot against the stock price at the expiration date for this strategy....
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- Spring '11