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Current stock price for Amazon is $500. A call option on Amazon stock with the exercise price of $500 and maturity of 1 month sells

Current stock price for Amazon is $500. A call option on Amazon stock with the exercise price of $500 and maturity of 1 month sells at $10 premium. Also, a put option on Amazon stock with the exercise price of $500 and maturity of 1 month sells at $5 premium. PLEASE BE SURE TO SHOW YOUR WORK VERY CLEARLY IF YOU WANT TO BE ELIGIBLE FOR PARTIAL CREDIT.

a. Plot the payoff against Amazons stock price if you buy Amazon stock and sell call option on Amazon stock. (2 pts)

b. Plot the payoff against Amazons stock price if you buy both Amazon stock and put option on Amazon stock. (2 pts)

c. Plot the payoff against Amazons stock price if you sell both call option and put option on Amazon stock. (3 pts) Try by yourself (well do this in Tuesdays class)

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