This is an Excel homework on options.

Very important:

You must label your x-axis and y-axis.

You must provide info on the graph, which means what the graph shows, title of the graph.

If there are more than one line on the table, you must separate them either with color or solid versus broken line, as in my lecture notes.

Appendix-2:

Some Problems to Work on Option

NOTE: For each problem on options on stocks, one option contract is equal to 100 shares of underlying stock, e.g. 1 option = 100 share.

For example, if one buys and sell 3 option contract, this amounts to 3x100=300 of shares.

This feature of options on stocks also applies to the premium of options.

For example, if one buys 5 option contract on IBM stocks @ $6.75 for each option, then it means that long position pays total of $3,375 (= $6.75 x 100 x 5)

Problem-03a: You sell (short position) 12 European call option contracts on ZZZ stock at the premium of $8.5. The exercise price of the option is S100, the maturity of the options is 3-month, and the stock curently is trading at $98 i. What is the payoff of your position if the stock is at S105? Show the result numericall)y Repeat i. for the stock price of S93 ii. Problem-03b: For problem-03a i. What is the profit (P/L) of your position if the stock is at $105 and at $93? BEP on one option, rather than for the entire value of the investment!) calculating and graphing, rather than using entire value of the investment.] Problem-03c (Excel Exercise): For problems-03a and-03b, assume that Show the results numerically? What is the Break Even Point (BEP) of your investment? (It is easier to find the ii. For the following Excel exercise, you should use one option to one underlying in XYZ stock price at maturity will take values between $75 and S130 in increment of S5 i. Will the call (option) buyer exercise the option? Give only NO, INDIFFERENT, YES answer. This is a qualitative question? ii. At each likely underlying price at maturity, calculate and show the Payoff and P/L numbers using formulas (in Excel!). Note that stock price of ZZZ ranges from $75 of S130 in increments of $5. iii Graph your numbers found in ii. iv. Integrate numbers calculated in Problem-03a i, ii, and Problem-03b i, ii. (This means put these numbers into the graph)