answer 1a-d

PAGE SO THAT WE CAN ALPHABETIZE THESE EASILY. THANKS IN ADVANCE! Use the three tables below to answer the following questions Cable 1 GOOG(GOOGLE INC (C)) Options Chain Exchange CBOE Options Rangers Near the Money Expiration 2015 January View Chain Bid: 529 85 Ask: 530 65 Size: 12 Vot: 5341 Last 535.21 Change oo Jan 27, 2015 @ 09 20 ET Calls Puts JANUARY 2018 (EXPIRATION: 01/30) Bid Ask Vol Int 00 00 00 0 261 00 00 00 0 140 00 00 00 Strike GOOG1530M510-E GOOG1530M5125E GOO0150515E JANUARY 2015 (EXPIRATION: 01/30) Met Bid Ask Vol Int 00 00 00 0 1503 00 00 00 0 205 00 00 00 0 1152 00 00 00 173 00 00 00 0 00 00 00 0 00 00 00 0 2 2 3 B0001530A510-E GOOG1530A5125E GOOG1500A515E GOOG1530A5175E GOOG1530A520- GOOG1530A522 55 QO0G1530A525E GOOG1500A527 SE GO001530A530 E GOOG1530A5325- GOOG1530A535E GOOG15504537 5-E GOOG1530A540 E GOOG1500A542 5E GOOG15304545 904 00 00 00 0 00 000 00 000 00 00 00 0 00 00 00 0000000 00 00 00 0 00 00 00 00 00 00 0 00 00 00 0 00 00 00 0 00 00 00 0 G000153041517 SE GOOG1530520 E GOOG1530M522 50 GOOG1530025 GOOG4530116275 GOOG15300530 E GO0015315325 GOOG1530535 GOOGOMET SE GOOG1530M5-40-E GOOG1530425-425- GOOG1530M545-E 10 78 00 00 00 0 1198 3 13 14 0 0 271 915 801 7 20 1038 497 518 1410 1665 1390 00 00 00 00 00 00 00 00 00 00 00 00 0 72 Table 2 GOOG(GOOGLE INC (CH) Options Chain ace Last 510.66 Change Calls Puts GOOGDE GOOGLE GOOSE GOOSE 0000 GOOSE GODE 00005 000SDE GOOSE 3000+ 5 2 SE GOOGASSOVERSE 88 DOOGE GOOGSE GOOGSE GOOGSTE GOO015 SE OOOC845 E 000010ASE Table 3 GOOG(GOOGLE INC (C)) Options Chain Exchange Co n se rves the Money Expiration 2015 May 2016 @ 16 12 ET Bit wo Last 536.36 Calls JANUARY 2015 EXPAN P uts JANUARY 2018 (EXPRANON 0000 GOOG15 0000ADISE GOOG50175 GOOGLE + 30000 GOOG15 GOOSE GOOGIE 00001 2000ADE GOOGLE GOCCESSOUSSE 00001 GOOSE GOOGLE GOOGIOSO SE Table 2 1. (65 points total) a) (5 points) Suppose we play a strangle by buying a 542.5 call and a 527.5 put on Table 1 and close at Table 2. Calculate the profit or loss AND rate of retum. b) (5 points) Suppose we waited and closed at Table 3 instead of Table 2. Calculate the profit or loss AND rate of return c) (25 points) We are now going to graph the profit functions for the strangle for both the long and short strangle where both players opened up the positions at Table 1. We are going to plot the profit loss for both players for two points on each of the profit functions Point(s) A are associated with the spot at expiration as it is in Table 2spot-5510.66 (there are two point A's, one for buyer of the strangle and one for the writer of the strangle. The second point B's are associated with the sport expiration at Table 3 - 536.36. Again, there are two point B's. Be sure to label the break-even points there are two of them!). d) (10 points) For points) A. Include the math as to how you calculated the payoffs for each player and prove that this is indeed a zero sum game! Assume importantly that the owner of the option that is in the money EXERCISES the option PAGE SO THAT WE CAN ALPHABETIZE THESE EASILY. THANKS IN ADVANCE! Use the three tables below to answer the following questions Cable 1 GOOG(GOOGLE INC (C)) Options Chain Exchange CBOE Options Rangers Near the Money Expiration 2015 January View Chain Bid: 529 85 Ask: 530 65 Size: 12 Vot: 5341 Last 535.21 Change oo Jan 27, 2015 @ 09 20 ET Calls Puts JANUARY 2018 (EXPIRATION: 01/30) Bid Ask Vol Int 00 00 00 0 261 00 00 00 0 140 00 00 00 Strike GOOG1530M510-E GOOG1530M5125E GOO0150515E JANUARY 2015 (EXPIRATION: 01/30) Met Bid Ask Vol Int 00 00 00 0 1503 00 00 00 0 205 00 00 00 0 1152 00 00 00 173 00 00 00 0 00 00 00 0 00 00 00 0 2 2 3 B0001530A510-E GOOG1530A5125E GOOG1500A515E GOOG1530A5175E GOOG1530A520- GOOG1530A522 55 QO0G1530A525E GOOG1500A527 SE GO001530A530 E GOOG1530A5325- GOOG1530A535E GOOG15504537 5-E GOOG1530A540 E GOOG1500A542 5E GOOG15304545 904 00 00 00 0 00 000 00 000 00 00 00 0 00 00 00 0000000 00 00 00 0 00 00 00 00 00 00 0 00 00 00 0 00 00 00 0 00 00 00 0 G000153041517 SE GOOG1530520 E GOOG1530M522 50 GOOG1530025 GOOG4530116275 GOOG15300530 E GO0015315325 GOOG1530535 GOOGOMET SE GOOG1530M5-40-E GOOG1530425-425- GOOG1530M545-E 10 78 00 00 00 0 1198 3 13 14 0 0 271 915 801 7 20 1038 497 518 1410 1665 1390 00 00 00 00 00 00 00 00 00 00 00 00 0 72 Table 2 GOOG(GOOGLE INC (CH) Options Chain ace Last 510.66 Change Calls Puts GOOGDE GOOGLE GOOSE GOOSE 0000 GOOSE GODE 00005 000SDE GOOSE 3000+ 5 2 SE GOOGASSOVERSE 88 DOOGE GOOGSE GOOGSE GOOGSTE GOO015 SE OOOC845 E 000010ASE Table 3 GOOG(GOOGLE INC (C)) Options Chain Exchange Co n se rves the Money Expiration 2015 May 2016 @ 16 12 ET Bit wo Last 536.36 Calls JANUARY 2015 EXPAN P uts JANUARY 2018 (EXPRANON 0000 GOOG15 0000ADISE GOOG50175 GOOGLE + 30000 GOOG15 GOOSE GOOGIE 00001 2000ADE GOOGLE GOCCESSOUSSE 00001 GOOSE GOOGLE GOOGIOSO SE Table 2 1. (65 points total) a) (5 points) Suppose we play a strangle by buying a 542.5 call and a 527.5 put on Table 1 and close at Table 2. Calculate the profit or loss AND rate of retum. b) (5 points) Suppose we waited and closed at Table 3 instead of Table 2. Calculate the profit or loss AND rate of return c) (25 points) We are now going to graph the profit functions for the strangle for both the long and short strangle where both players opened up the positions at Table 1. We are going to plot the profit loss for both players for two points on each of the profit functions Point(s) A are associated with the spot at expiration as it is in Table 2spot-5510.66 (there are two point A's, one for buyer of the strangle and one for the writer of the strangle. The second point B's are associated with the sport expiration at Table 3 - 536.36. Again, there are two point B's. Be sure to label the break-even points there are two of them!). d) (10 points) For points) A. Include the math as to how you calculated the payoffs for each player and prove that this is indeed a zero sum game! Assume importantly that the owner of the option that is in the money EXERCISES the option