Fin 463/565 inclass assignment Chapter 9 1. Draw a payoff and a profit line graph for writing a put option at K= $60. Each option price costs = $8. Under what circumstances will the writer of the option (the party with the short position) make a profit? 2. Consider an exchange-traded call option contract that lets you buy 500 shares with o strike price of $40. Explain how the terms of the option contract change when there is a) A 10% stock dividend b) A 10% cash dividend c) A 4-for-1 stock split a) Suppose you write five naked call option contracts. The option price is $3.50, the strike price is $60.00, and the stock price is $57.00. What is the margin requirement? b) Suppose you write five naked PUT option contracts. What is the initial margin requirement