2. (a) If you feel that Stock price can go up to $3,000 or can go down to $1,800, but you aren't sure about the direction, what strategy would be more appropriate when you choose options with strike price of 2,100. Explain. Calculate the payoff and profit of the strategy. [5+2+2=8 marks] (b) At what stock price(s) your profit would be zero in the above case? [5 marks] (c) If you expect stock price is more likely to go up to $3,000, what strategy would better serve you? Explain. Calculate payoff and profit of the strategy. [4+2+2=8 marks] (d) Calculate the range of stock prices beyond which your profit would be positive if you follow the strategy in (c)? [6 marks] 300 Strike 1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2100 2200 2300 2800 Price 337.72 324 306.77 287.8 285.7 292.12 261.16 218 231 221.18 202.25 146 106.6 70 12.25 Bid 339.5 323.5 309.6 294,3 279.6 266.1 251.8 237 224 211.5 200 145.5 102.5 73.1 12.5 Ask Change Change Volume Interest 348.4 -4.28 - 125 3 618 3321 0 2 100 316 101.61 49.53 3 53 - 26.1 -8.311 1 231 286.8 28.6 11 12 2 120 2732 24.02 8.96 1 307 258 4 0 442 2452 0 41 234 0 2 133 219.5 27.83 1439 87 209 0 5 520 1542 -41 -2.73 18 764 1087 -3.4 -3.092 11 766 792 -4.74 -6.34 19 13.9 0 2 55 NUNNN 257 50 48 49.8 42 -7.75 7 7 338 1800 52.7 51.6 573 -22 -4013 1 75 1820 57.4 56.1 612 -7.6 -11.69 3 19 1840 62.8 60.5 63.6 01 0.16 1 28 1860 68.2 66.7 69 - 14.4 1880 - 17.43% 4 22 75.2 71.6 75 14 1904 1 319 1900 83.2 77.5 809 32 400% 1 17 1920 89.2 84 87.4 -73.3 -45.11 3 w 6 1940 93.9 90.4 94.7 0.7 0.75* 1 49 1960 1028 96.1 1025 1 0.98% 2 28 1980 110 105.8 1101 11 1015 51 45 2000 153.25 151.9 156.4 -255 - 164 7 23 2100 200 208.1 213.9 -26.25-1160* 1 2200 280.8 2748 281.8 0 4 2300 935 7122 722 0 0 2800