Consider the following table answer the questionsbelow:

Expiration	Strike	Call	Put
May	90.00	4.40	2.00
May	95.00	3.30	3.00
May	100.00	2.50	4.00

Current stock price is $92.00.

(1) (5 points) You are considering aprotective put buying. Construct an appropriate protective put buying usingputs with X = $90.Make up the profit/loss table and graph the results. Identify and plot thebreak even stock price.Explain the situation under which you may consider this strategy.

(2) (5 points) You are considering abull spread. Construct an appropriate bull spread using puts with X = $90 and $95. Make up the profit/loss table and graph the results. Identify and plot thebreak even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.

(3) (5 points) You are considering astraddle. Construct an appropriate straddle using X = $90 and $95. Make up the profit/loss table and graph the results. Identify and plot thebreak even stock price and the maximum and minimum profits.Explain the situation under which you may consider this strategy.

(4) (5 points) You are considering abutterfly spread (orsandwich spread)using PUT options. Construct an appropriate butterfly (sandwich) spread. Make up the profit/loss table and graph the results. Identify and plot thebreak even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.

(5) (5 points) You are consideringa strategy that holds one stock long; one put long with X = $90; and two calls short with X = $95.Make up the profit loss table and graph the results. Identify and plot thebreak even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.

(6) (5 points) You are consideringa strategy that holds one call short with X = $90; one put short with X = $90; and two calls short with X = $95.Make up the profit loss table and graph the results. Identify and plot thebreak even stock price and the maximum and minimum profits. Explain the situation under which you may consider this strategy.

Answer rating: 100% (QA)

1 Protective Put Buying To construct a protective put buying strategy we buy a put option with a strike price of 90 ProfitLoss Table apache Copy Stock Price Put Option Total 90 or below 000 000 9200 2... View the full answer