Question

1. Short a call at 115, long a put at 115, and long one share of the stock.

(Please include a table with at least 50 data points for the graph. Graph the value of your portfolio as a function of the relevant stock price. Graph for stock prices between 100 and 140.)

Answer 1

Short Call option payoff = -Max(current stock price -strike price,0)

Long put option payoff =Max(Strike price - current stock price,0)

Strike price = $115

Assume both call and put option has same price which offset each other

Value of the portfolio = payoff on call option + payoff on put option + payoff on long one share

Graph:

Share price	Payoff on short call option	Payoff on long put option	Payoff on long one share (assume current price $100)	Portfolio Value
100	0	15	0	15
101	0	14	1	15
102	0	13	2	15
103	0	12	3	15
104	0	11	4	15
105	0	10	5	15
106	0	9	6	15
107	0	8	7	15
108	0	7	8	15
109	0	6	9	15
110	0	5	10	15
111	0	4	11	15
112	0	3	12	15
113	0	2	13	15
114	0	1	14	15
115	0	0	15	15
116	-1	0	16	15
117	-2	0	17	15
118	-3	0	18	15
119	-4	0	19	15
120	-5	0	20	15
121	-6	0	21	15
122	-7	0	22	15
123	-8	0	23	15
124	-9	0	24	15
125	-10	0	25	15
126	-11	0	26	15
127	-12	0	27	15
128	-13	0	28	15
129	-14	0	29	15
130	-15	0	30	15
131	-16	0	31	15
132	-17	0	32	15
133	-18	0	33	15
134	-19	0	34	15
135	-20	0	35	15
136	-21	0	36	15
137	-22	0	37	15
138	-23	0	38	15
139	-24	0	39	15
140	-25	0	40	15
141	-26	0	41	15
142	-27	0	42	15
143	-28	0	43	15
144	-29	0	44	15
145	-30	0	45	15
146	-31	0	46	15
147	-32	0	47	15
148	-33	0	48	15
149	-34	0	49	15
150	-35	0	50	15

Excel formula: