Spot price Buy at ATM call @ 12 Sell OTM call @ 13 Net payoff 8 2.75 -3.6 -0.85 9 1.75 -2.6 -0.85 10 0.75 -1.6 -0.85 11 -0.25 -0.6 -0.85 12 -0.25 0.4 0.15 13 -0.25 1.4 1.15 14 -0.25 1.4 1.15 15 -0.25 1.4 1.15 1. Based on the table draw the graph of Bull put Spread net payoff 2. Calculate Max loss, Max Profit, and Break even point: and plot in the graph above: a. Max loss: b. Max Profit: c. Break even point:
Spot price Buy at ATM call @ 12 Sell OTM call @ 13 Net payoff 8 2.75 -3.6 -0.85 9 1.75 -2.6 -0.85 10 0.75 -1.6 -0.85 11 -0.25 -0.6 -0.85 12 -0.25 0.4 0.15 13 -0.25 1.4 1.15 14 -0.25 1.4 1.15 15 -0.25 1.4 1.15 1. Based on the table draw the graph of Bull put Spread net payoff 2. Calculate Max loss, Max Profit, and Break even point: and plot in the graph above: a. Max loss: b. Max Profit: c. Break even point:
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
|
Spot price |
Buy at ATM call @ 12 |
Sell OTM call @ 13 |
Net payoff |
|
8 |
2.75 |
-3.6 |
-0.85 |
|
9 |
1.75 |
-2.6 |
-0.85 |
|
10 |
0.75 |
-1.6 |
-0.85 |
|
11 |
-0.25 |
-0.6 |
-0.85 |
|
12 |
-0.25 |
0.4 |
0.15 |
|
13 |
-0.25 |
1.4 |
1.15 |
|
14 |
-0.25 |
1.4 |
1.15 |
|
15 |
-0.25 |
1.4 |
1.15 |
1. Based on the table draw the graph of Bull put Spread net payoff
2. Calculate Max loss, Max Profit, and Break even point: and plot in the graph above:
a. Max loss:
b. Max Profit:
c. Break even point:
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