Discuss the risks and payoffs of the following positions, accompanied by payoff graphs. Buy a stock. Buy a call. Buy stock and sell a call option on the stock (covered call).
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Discuss the risks and payoffs of the following positions, accompanied by payoff graphs.
-
Buy a stock.
-
Buy a call.
-
Buy stock and sell a call option on the stock (covered call).
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- Discuss the risks and payoffs of the following positions, accompanied by payoff graphs. Buy a bond. Buy stock, buy a put, and sell a call. Sell a put (naked put).Please answer one of the following questions in detail, providing examples whenever applicable. Discuss the risks and payoffs of the following positions, accompanied by payoff graphs. Buy stock and a put option on the stock. Buy a stock. Buy a call. Buy stock and sell a call option on the stock (covered call). Buy a bond. Buy stock, buy a put, and sell a call. Sell a put (naked put).Graphically show a covered call options strategy, including payoff. Explain why an investor mayuse this option strategy.
- Describe two conditions which will determine whether or not a stock is in equilibrium. Can either of these conditions show the stock is in equilibrium? Please use a numerical example to describe your response.How to use call options and put options to create a synthetic short position in stock?Describe what a stock option is. what does it means to buy a "put" or a "call" and what you are expecting the stock to do for each (ie go up or down in price). Discuss when you would make money on a put option and when you would make money on a call option.
- Describe the effect of a change in each of the following factorson the value of a call option: (1) stock price, (2) exercise price,(3) option life, (4) risk-free rate, and (5) stock return standarddeviation (i.e., risk of stock).Please show me how to calculate earnings from the stock options with the scenario below.Describe how a typical stock option plan works. What are someproblems with a typical stock option plan?
- When a market order is placed, the price that is paid for the stock is the a. stock's fundamental value. b. market price at time of the execution. c. quoted price. d. market price at time of the quote.Briefly explain the pay-off structure of futures and options contract. Also make it more clear with the help of a flowchart.Step by step explaination (use attached diagram) This question relates to Diagram 6 from the diagrams, which shows the probability distributions of returns for Shares N, P and Q. In which share would a risk-averse investor be most likely to invest? Select one: a. Share N b. Share P c. Share Q d. We need more information about the investor's risk tolerance to determine which share the investor would prefer.