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Q 5 . Draw a payoff diagram of a when you a ) buy a call option with strike price 1 0 . What is
Q Draw a payoff diagram of a when you
a buy a call option with strike price What is the value of the option at maturity if
the value of the underlying stock is
b buy a put option with strike price What is the value of the option at maturity if the
value of the underlying stock is
c sell a call option with strike price
d sell a put option with strike price
e For each diagram a and b above, indicate where the option is inthemoney, atthe
money, and outofthemoney.
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