{VERSION 6 0 "IBM INTEL NT" "6.0" }
{USTYLETAB {CSTYLE "Maple Input" -1 0 "Courier" 0 1 255 0 0 1 0 1 0 0 
1 0 0 0 0 1 }{CSTYLE "" -1 256 "" 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 }
{CSTYLE "" -1 257 "" 0 1 0 0 0 0 0 1 0 0 0 0 0 0 0 0 }{PSTYLE "Normal
" -1 0 1 {CSTYLE "" -1 -1 "" 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 1 }0 0 0 
-1 -1 -1 0 0 0 0 0 0 -1 0 }{PSTYLE "Title" 0 18 1 {CSTYLE "" -1 -1 "" 
1 18 0 0 0 0 0 1 1 0 0 0 0 0 0 1 }3 0 0 -1 12 12 0 0 0 0 0 0 19 0 }
{PSTYLE "Author" 0 19 1 {CSTYLE "" -1 -1 "" 0 1 0 0 0 0 0 0 0 0 0 0 0 
0 0 0 }3 0 0 -1 8 8 0 0 0 0 0 0 -1 0 }{PSTYLE "" 19 256 1 {CSTYLE "" 
-1 -1 "" 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 }1 0 0 -1 -1 -1 0 0 0 0 0 0 
-1 0 }}
{SECT 0 {EXCHG {PARA 18 "" 0 "" {TEXT -1 17 "Options Worksheet" }}
{PARA 256 "" 0 "" {TEXT -1 28 "Maple9 worksheet - intro.mws" }}{PARA 
0 "" 0 "" {TEXT -1 30 "For all problems, assume the r" }{TEXT 256 19 "
isk-free rate is 5%" }{TEXT -1 35 " and the positions are established \+
" }{TEXT 257 8 "4 months" }{TEXT -1 17 " till expiration." }}{PARA 0 "
" 0 "" {TEXT -1 0 "" }}}{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 0 8 "resta
rt;" }}}{EXCHG {PARA 0 "" 0 "" {TEXT -1 164 "Define a function c(s,e) \+
to represent the value of a call option at expiration with exercise pr
ice e and s equal to the price of the underlying stock at expiration.
" }}}{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 0 25 "c := (s,e) -> max(0,s-e
);" }}}{EXCHG {PARA 0 "" 0 "" {TEXT -1 102 "Suppose we purchase a call
 option on Intel for 3.25 with exercise price of 35.  The payoff diagr
am is:" }}}{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 0 67 "plot(c(s,35),s=0.
.40,title=`Payoff Diagram of Long a Call Option`);" }}}{EXCHG {PARA 0 
"" 0 "" {TEXT -1 87 "The profit and loss (P&L) diagram illustrates our
 profit and loss for this transaction." }}}{EXCHG {PARA 0 "> " 0 "" 
{MPLTEXT 1 0 76 "plot(c(s,35)-(4+1/8)*exp(.05/3),s=0..50,title=`P&L Di
agram of Call Option`);" }}}{EXCHG {PARA 0 "" 0 "" {TEXT -1 65 "Payoff
 diagram for the writer of the call option (short the call)" }}}
{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 0 75 "plot(-c(s,35),s=0..50,-15..5
,title=`Payoff Diagram - Short a Call Option`);" }}}{EXCHG {PARA 0 "" 
0 "" {TEXT -1 11 "Bull spread" }}}{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 
0 40 "pbull := plot(c(s,30)-c(s,40),s=20..60):" }}}{EXCHG {PARA 0 "> \+
" 0 "" {MPLTEXT 1 0 32 "pcall := plot(c(s,35),s=20..60):" }}}{EXCHG 
{PARA 0 "> " 0 "" {MPLTEXT 1 0 30 "plots[display](\{pbull,pcall\});" }
}}{EXCHG {PARA 0 "> " 0 "" {MPLTEXT 1 0 0 "" }}}}{MARK "15" 0 }
{VIEWOPTS 1 1 0 1 1 1803 1 1 1 1 }{PAGENUMBERS 0 1 2 33 1 1 }