1. A portfolio manager has a portfolio of 5 stocks (refer to the table below) and wants to generate income shorting calls on all 5 stocks. At the expiration of the options contract the market has increased by 3%.

Show in a table, the complete P&L results for the shares, the options and the total.

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1. Calculate the final P&L (in $) and the returns (in %) over the total initial value of the portfolio. Indicate which stocks could be assigned (sold) at the options expirations and why.

Short 5 ARC June 62.5 Calls at $0.90

Short 4 BEL June 68 Calls at $3.90

Short 4 IP June 77 Calls at $1.20

Short 3 UPJ June 92 Calls at $3.90

Short 5 FDX June 63.50 Calls at $1.30

2. What would be the final result if this investor sell 2 options Call contracts June 890 (strike) OEX at $ 6.20 (premium) , with OEX currently trading at $870. Calculate the P&L (in $) and the additional return (in %) on the current portfolio. Show all calculations