Question: consider the following position: Write 1 IBM Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts

consider the following position: Write 1 IBM Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts @ $1.20 and buy 2 Jan 125 puts @ $2.70. IBM stock is currently trading at $125.60 per share.

a) Find the cost of this position.

b) Write the profit function for this position

c) Draw a profit-loss diagram for this position

d) Find the break-even stock prices for this position

e) Find the maximum profit for this position

drags f) Find the maximum loss for this position

Please use ExcelExcel and show the excel formulas used

(notice: the person who keeps answering this, is messing up his graph because the cost is in only one box, F2, and when he drags down the formula to other boxes the cost moves. you must use dollar signs to prevent that from happening)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Two couples act on the frame. If d = 4 ft, determine the resultant couple moment. Compute the result by resolving each force into x and y components and (a) Finding the moment of each couple (Eq....

1. Consider the following position: Write 1 IBM Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts @ $1.20 and buy 2 Jan 125 puts @ $2.70. IBM stock is currently trading at...

consider the following position: Write 1 IBM Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts @ $1.20 and buy 2 Jan 125 puts @ $2.70. IBM stock is currently trading at...

Consider the following position: Write 1 IBM Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts @ $1.20 and buy 2 Jan 125 puts @ $2.70. IBM stock is currently trading at...

Consider the following position: Write 1 Apple Jan 115 call @ $11.00 and buy 2 Jan 125 calls @$3.10 and write 4 Jan 120 puts @ $1.20 and buy 2 Jan 125 puts @ $2.70. Apple stock is currently trading...

The last exam will cover these 3 tests plus a few small quizzes. The attached should give you a good idea of the material. Let me know if you have any questions. You can see which I got correct with...

one question with few part info.. 1. Perform the following analyses options on Lotus's common stock that mature in February 1994 and that have an exercise price of $55 per share. (1) Compute net...

The date for the table is November 2007. pi Problems 1 - 4 are based on the prices in the table on the next page All analyses of cash flows in the tables are per share. Q1. Use a table of cash flows...

Option Questions art is trading at $59.50 on Dec. 1. The following options are available on WalMart with a January 16h expiration date. Strike Premium Put Call Strike Premium $55.00 $0.35 $57.50...

Explain how (a) A soap such as sodium stearate stabilizes a colloidal dispersion of oil droplets in water; (b) Milk curdles upon addition of an acid?

An objective of business enterprise financial reporting is to provide information about an enterprises performance provided by measures of earnings and its components. City governments, how-ever, are...

Which of the following accurabely dever be the functions and limitations of Ginnie Mae IGNEAN? GNMA puarantect timely parment of principal and interest to investors in morterge - bacherd securities...

In Real - time Operating systems are _ _ _ _ _ _ _ _ Question 4 options: Primarily used on mainframe computers Used for monitoring events as they occur Used for program development Used for real -...