Question: 4. Using R, complete the following steps. a. Create a function that can be used to generate the net returns from exercising a Call Option
4. Using R, complete the following steps.
a. Create a function that can be used to generate the net returns from exercising a Call Option where inputs include strike price, ending price, and premium rate. (Note: The function should be general enough to take any combination of these three inputs and provide the net returns from exercising.)
b. Using the function created above and assuming a strike price of 100 and a premium rate of 5, compute the net returns for a string of ending prices for 50, 55, 60,...,145,150. Plot the net returns against ending price.
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