(a)On 26 March 2020 a Woolworths (WOW) share was trading at $36.75 in ASX. The premium for Puts option with a strike price (exercise price) of $35.00 with an expiry date on the month of your next birthday was $2.00 per share. Draw the line curve of return (Profit/Loss) from the investment in this option against share price varying from $0 to $40. (Draw the price per share on X-axis from $0 to $40 and Profit/Loss in Y-axis. Must use Excel or similar software for the plot.) 2 marks

(b)If you had $2,000 to invest, how much profit would you make if the price fell to $16.00 per share of WOW. Note that you have to pay a total brokerage fee of $19, options are traded in bundles of 100 shares in ASX, and you cannot overspend. (You may not be able to spend some amount of money if it is too little for a bundle of shares.)