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In your spreadsheet, please copy and paste the following table, put in your answers to complete the table, and draw the payoff diagram (on date
In your spreadsheet, please copy and paste the following table, put in your answers to complete the table, and draw the payoff diagram (on date of delivery/expiration). The first row of the table lists possible stock prices for stock A on the date of deleivery/expiration. (a) Buy a futures contract on Stock A with a futures price of $16. The diagram should have net profit/loss on the y axis, and price of stock A on the x axis. Price of Stock A 15 17.5 25 Profit/Loss of futures (b) Buy a share of Stock A, buy a put option on the share, and sell a call option on the share. Assume that each option has the same exercise price of $16.0 and the same expiration date (ignore the option premiums). The diagram should have value of portfolio (as indicated in the last row of the table) on the y axis, and price of stock A on the x axis. Price of Stock A 15 18 25 Value of stock Value of buying put Value of selling call Value of portfolio
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