USE the data on page 3 for options expiring in September 2019 on Home Depot ( HD ) to answer questions 2 , 3 , and 4. 2 . What is a straddle , and why would an investor choose to buy one ? Assume an investor buys a $150 Straddle on HO. At what stock prices at Expiration will that position be profitable ? Assume at expiration HD sells for $1.54 : what will the "` return be on the straddle ? How much'S profit or loss will the investor Earn per share ? 3. Assume a different investor is bullish on HO and is considering the following three potential investments . If at option expiration in September the stock price is $216 , what will the return be 196 and S per share ) for each choice :" a. Just buying the stock at $189. 25 . bo . Just buying the $200 call ." [ . Buying a bull spread using the $200 and $210 contracts . 4. ASSUME an investor currently owns HO and wishes to construct a collar using the $185 put and the $195 call . Why might she want to do this ?" What would be the net cost of setting up this position today ( assume that she already owns the stock ) . At expiration in September , she plans to liquidate her entire* position . What would be the value of her position at that point assuming HD trades at .` A. 51BO $. 5200 C. 5220September, 2019 Expires September 20, 2019 In the Money Calls Puts Last Change Bid Ask Volume Open Int. Strike Last Chang Bid Ask Volume Open Int. 92.45 96.60 95.00 0.07 0.01 0.21 87.50 91.80 100.00 0.01 0.24 105,00 06'98 82.55 0.01 0.37 77.55 81.80 110.00 0.17 0.33 72.60 77,00 115,00 0.24 0.40 71.80 67.70 71.90 120.00 0.35 0.32 0.48 OL 62.75 67.25 125.00 0.48 0.42 0.56 un 62.00 57.85 62.40 130.00 0.64 +0.05 0.53 0.68 10 11 53.00 57.60 O 135.00 0.68 0.82 43.70 48.15 52.55 140.00 0.92 0.12 0.88 1.00 43.50 48.00 145,00 1.15 -0.17 1.12 1.24 6/ 38.65 42.80 150.00 1.70 -0.18 1.43 1.57 48 58 34.30 10 155,00 2.10 0.63 1.85 1.99 38 64 33.37 46.42 29.75 33.70 160.00 2.48 +0.13 2.29 2.59 10 75 25.50 29.60 165.00 3.15 +0.13 3.05 3.25 10 60 25.30 22.75 24.65 170.00 3.97 -0.05 3,95 450 2 66 20.90 2.00 19.05 20.75 175.00 5.40 +0.12 5.10 5.35 m m 64 16,70 +4.10 15.95 16.35 35 180.00 6.90 6.55 6.80 106 12.40 -2.10 12.55 13.05 12 185,00 8.39 0.26 8.00 8.95 20 238 Last Trade 189.25 as of 03/27/19 4:00 PM ET 10.49 -0.05 9.85 10.20 W 180 190.00 10.60 +0.12 10.25 10.80 7.60 +0.25 7.40 7.75 86 195,00 13,05 13.35 5.50 0.43 5.40 6.00 92 200.00 15.13 439 16.00 16.35 3 3.80 -0.10 3.80 4.05 141 127 205.00 19.35 19.70 2.70 +0.12 2.09 2.74 10 182 210,00 2.20 24 45 1.89 -0.22 0.88 1.83 5 N 215.00 26.45 28.50 1.18 +0.22 1.04 1.19 5 220.00 9.80 32.65 0.60 0.77 225,00 3435 38.40 0.42 0.05 0.49 un 230.00 38.90 13.30 0.19 0.32 0 235,00 13,78 43 55 18.20 10 10