Attached are 5 questions related to hedging, swaps and future contracts. See attached for questions.

Problem 1 The following is the data on a weather option: Option type: CALL Met Office: Chicago O'Hare International Airport Underlying index: Heating Degree Days Term: Nov. 1 - Mar. 31 Structure: Call option Strike = 4500 HDDs Tick size = $5,000 / HDD Limit payoff = $1 million Premium $180,000 a. On a graph, please plot the payoff (value) - that is, do not consider the premium - of the option on the expiration day as a function of the HDD Index for the period Nov 1 - Mar 31. Please mark the graph very carefully (the maximum payoff; the point(s) of kink; etc.) b. Now please plot the option profit diagram (that is, consider the premium), again marking the graph very carefully. c. What is the breakeven level of the HDD index, i.e. the level at which the trader makes zero profit on the put? Problem 2 Given the following information on the available options, you need to hedge the underlying commodity as a producer with a zero-cost collar. The underlying price is $630. You choose a one-year $620 put option. Jan2164 PV Expire Int FV PRICE VOL STK Call Put Strad C Dlt P Dlt 630 Jan-2165 0.00 5 633.1 665 500 158.4 511 25.58 539 184.0 365 8.052 942 0.33 630 Jan-2165 0.00 5 633.1 665 0.33 530 138.3 005 35.22 183 173.5 223 7.543 862 630 Jan-2165 0.00 5 633.1 665 0.33 560 120.0 379 46.75 599 166.7 939 7.001 731 630 Jan-2165 0.00 5 633.1 665 0.33 590 103.6 494 60.17 585 163.8 252 6.441 457 630 Jan-2165 0.00 5 633.1 665 0.33 620 89.07 566 75.42 293 164.4 986 5.877 084 630 Jan-2165 0.00 5 633.1 665 0.33 650 76.22 209 92.40 239 168.6 245 5.320 967 630 Jan-2165 0.00 5 633.1 665 0.33 680 64.96 979 110.9 945 175.9 643 4.783 306 630 Jan-2165 0.00 5 633.1 665 0.33 710 55.18 534 131.0 646 186.2 499 4.271 998 630 Jan-2165 0.00 5 633.1 665 0.33 740 46.72 803 152.4 702 199.1 982 3.792 683 630 Jan-2165 0.00 5 633.1 665 0.33 770 39.45 681 175.0 686 214.5 254 3.348 959 a. Which call option must you choose to have a position closest to zero-cost? b. What is the total premium paid (received) when the positions are taken? c. Fill out the following table. Price of underlying at expiration Commodity value Put position value 600 620 635 650 670 1.8852 1 2.3965 7 2.9418 2 3.5057 8 4.0741 3 4.6342 3 5.1756 7 5.6903 7 6.1725 7 6.6186 1 Call position value Premium Net Hedged Price Problem 3 a. Given the following volatility matrix, calculate the volatility of the 4-month European option purchased at the end of January and expiring at the end of May. \"One\" (\"two\