1. The following questions refer to options on Cerevel Therpeutics stock (Ticker: CERE), which closed today at $26.21/ share. Below are a table of today's closing prices on CERE options: a) Suppose that you own 1000 shares of CERE. You want to own CERE long-term, but you are nervous because CERE will report earnings in early December and you fear a negative eamings surprise. You decide to put a collar in place using puts with K=24 and calls with K=28. How much would this collar cost to protect your 1000 shares of CERE? P(K1)C(K2)0.242.07=1.83 b) Describe intuitively how this collar should perform. There is a cashflow inflow of 1.83 from the collar hence its acting as a protective put c) Create a table of values of your collar as a function of the price of CERE at the expiration of the option position. Use share prices in intervals of $0.50 in the range from $22 to $30