...y-axis is payoff)? Full Question
1. Draw the following:
1.a. The gross payoffs (do not factor in the cost of the options) of buying 2 calls and one put, graph this over stock price (x) and payoff
space. Assume they have the same strike.
1.b. The gross payoffs from shorting one call and one put, with the same strike.
2.Explain which of these graphs must you pay to have these potential payoffs and which would you expect to receive money to take the associated payoff structure?
(if you have the solution, please provide email. as it requires some illustration that can be done simply with paintbrush, it can be sent as an attachment via email. thanks)
1. Draw the following:
1.a. The gross payoffs (do not factor in the cost of the options) of buying 2 calls and one put, graph this over stock price (x) and payoff
space. Assume they have the same strike.1.b. The gross payoffs from shorting one call and one put, with the same strike.
2.Explain which of these graphs must you pay to have these potential payoffs and which would you expect to receive money to take the associated payoff structure?
(if you have the solution, please provide email. as it requires some illustration that can be done simply with paintbrush, it can be sent as an attachment via email. thanks)