Question: This is a Python assignment. Save your notebook as html and upload on Canvas. Q1. Assume that you have a list of stock prices ranging
This is a Python assignment. Save your notebook as html and upload on Canvas. Q1. Assume that you have a list of stock prices ranging from 30 to 150 . Plot a bull spread using calls: Buy a 3-month European call () with a strike price of $75 and sell a 3-month European call () with a strike price of $85. Show the following: 1. Chart showing the profit/loss for c1 at expiration 2. Chart showing the profit/loss for c2 at expiration 3. Chart showing the combination of the two plots (bull spread): long call (c 1) and short call ( c2). Include x and y axis labels and legend. Show long call with red color and short call with blue. 4. Chart showing the bull spread with green color, long call with red color and short call with blue color. Include x and y axis labels and legend. Q2. Assume that you have a list of stock prices ranging from 30 to 80 . Consider 3-month put options with strike prices of K1= $50,K2=$55, and K3=$60, cost p1=$2,p2=$4 and p3= \$7. Construct a butterfly spread: Buy p1 and p3 and short 2 put options p2. Show the following: 1. Chart showing the profit/loss for long p1. 2. Chart showing the profit/loss for long p3. 3. Chart showing the profit loss for short 2 put options p2 4. Chart showing a combination of long p1 (yellow), long p3 (blue), short 2 put options p2 (green) and the butterfly spread (red)
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