Stock A has expected return of 12% and standard deviation of 18%. Stock B has expected return of 7% and standard deviation of 6%. The correlation of returns between the two stocks is 0.45. You have put all of your money into these two stocks. Graph your expected return, and the standard deviation of your returns, as a function of your investment weight in A (w) as w runs from -2 to 2. So you want a graph with expected return on the y-axis and standard deviation on the x-axis.
You are short a call at 35, long a put at 43, and short one share of the stock. Graph the value of your portfolio as the stock price goes from 30 to 50.
Assume you are buying stock in Exxon. You buy a share of stock at 220, and a put option at 230 for 12. You sell a call option at 210 for 9. You hold your portfolio until the expiration date. On the expiration date you cash out your portfolio. Graph the profits of your strategy as the price of Exxon stock at the expiration date goes from 200 to 230.