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Help with part b. Please. The following table lists several options traded on the market. a. For each option i. indicate whether it is in-the-money
Help with part b. Please.
The following table lists several options traded on the market. a. For each option i. indicate whether it is in-the-money or out-of-money * ii. find the payoff of a long position in this option if it expired under the given market conditions (i.e. if the buyer would have to decide whether to exercise the option or not given the underlying price in the table). *For simplicity sake, ignore "at-the-money" classification for now. b. Select one call and one put option from the table (i.e. just two options total from the list above). Plot payoffs of a long and a short position in each of the selected option vs. the underlying price. Use separate graphs for each selected option (i.e. plot payoffs of the long and short positions in call on one graph and payoffs of a long and short positions in put on another graph - that's two graphs total). For plotting purposes, use the range of underlying prices from zero to twice the strike. Make sure to indicate which options you selectedStep by Step Solution
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