Current quotes that are available on Stock A on 2nd January 2017

	in $	in $
Series	Call	Put
Jan $5.20	0.17	0.35
Jan $5.10	0.26	0.26
Jan $5.00	0.35	0.17
Saham/Stock A		$5.10
Kadar Faedah/Interest Rate		3.25 p.a

Table 2: Quotes of Stock A, Call Jan17 and Put Jan 17

The number of days to maturity is 30 days (including the current day).

1. If you are long one $5.00 Jan17 Call Option with a delta of 0.50, and short one $5.00 Jan17 put, state your strategy and position. Illustrate your overall position in a profit/loss graph. What is your overall positions delta?

2. If the stock A rises to $5.50, please illustrate the resulting payoff of conversion strategy using the cashflows of the current day and maturity day, in both the stock and option markets. You may assume there is no transaction cost in this case.

3. Please draw the profit/loss of your strategy (in dotted lines) and the result of your net position (in continuous line) in a graph. Please label each strategy well.