Suppose XYZ stock has a price of $50 and pays no dividends. Suppose also that you enter a transaction on the stock today and wish to reevaluate your position in one year.
(a) Create a range of stock prices (say, $20 to $70 in intervals of $10) and draw payoff and profit tables for a long position in this stock. Also, create a payoff (not profit) graph.
(b) Create a range of stock prices (say, $20 to $70 in intervals of $10) and draw payoff and profit tables for a short position in this stock (i.e., short-selling the stock) Also, create a payoff (not profit) graph.