Answer to relevant QuestionsUsing the same information as the previous question, draw payoff and profit diagrams for a short position in the stock. Verify that profit is 0 at a price in 1 year of $55. Suppose XYZ stock pays no dividends and has a current price of $50. The forward price for delivery in 1 year is $55. Suppose the 1-year effective annual interest rate is 10%. a. Graph the payoff and profit diagrams for a ...Draw profit diagrams for the following positions: a. 1050-strike S&R straddle. b. Written 950-strike S&R straddle. c. Simultaneous purchase of a 1050-strike straddle and sale of a 950-strike S&R straddle. Construct a spreadsheet for which you can input up to five strike prices and quantities of put and call options bought or sold at those strikes, and which will automatically construct the total expiration payoff diagram for ...Compute estimated profit in 1 year if Telco sells collars with the following strikes: a. $0.95 for the put and $1.00 for the call. b. $0.975 for the put and $1.025 for the call. c. $0.95 for the put and $0.95 for the ...
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