Boeing 7E7 a financial analysis

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- Vishal Prabhakar

- Jayaraj Somarajan - Ajay Gnanashekaran

- Shafrin Maredia

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Table of Contents !

Sl.No Contents Page 1. Evolution of Project Boeing 7E7 1 2. Empirical Data 4 3. 7E7 Project NPV –DCF Analysis 5 4. WACC Calculation 7 5. Payback Period 11 6. Stock Options 12 7. @ Risk Analysis 22

10. Conclusion 23 11. References 24

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Table of Tables Table Number Content

Table 1 DCF Analysis Table 2 Variables Table 3 Regression Analysis Table 4 WACC Calculations Table 5 Payback Period Table 6 Depreciation Table 7 Call Option - NYSE Table 8 Call Option - S&P 500 Table 9 Put Option - NYSE

Table 10 Put Option - S&P 500 Table 11 Sell A Call - NYSE Table 12 Sell A Call - S&P 500 Table 13 Sell A Put - NYSE Table 14 Sell A Put - S&P 500 Table 15 Covered Call - NYSE Table 16 Covered Call - S&P 500 Table 17 Protective Put - NYSE Table 18 Protective Put - S&P 500 Table 19 Protective Collar - NYSE Table 20 Protective Collar - S&P 500 Table 21 Long Straddle - NYSE Table 22 Long Straddle - S&P 500 Table 23 Short Straddle - NYSE Table 24 Short Straddle - S&P 500

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Table of Exhibits List of exhibits! @ RISK Sensitivity analysis!Exhibit A Change in Stock Price - NYSE Exhibit B Payback Period - NYSE Exhibit C Change in Stock Price – S&P 500 Exhibit D Payback Period – S&P 500 Exhibit E Call Option - 2034 Exhibit F Put Option - 2034 Exhibit G Long straddle - 2034 Exhibit H Short straddle - 2034 Exhibit I Input Results Exhibit J Output Results Exhibit K Detailed Statistics Exhibit L Sensitivity Analysis Exhibit M Scenario Analysis Exhibit N Model Inputs Exhibit O Model Outputs !

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EVOLUTION OF PROJECT BOEING 7E7

Boeing has always been a giant in the Aircraft manufacturing industry having Airbus as its only

equal competitor. Boeing’s 737 have been considered to be one of the most successful ranges of

commercial jets produced. Boeing 777 was considered to be a success when it was launched in

1994 and from then it has not come up with a new commercial jet. It had announced and

cancelled various projects like the Sonic Cruiser which promised up to 20% faster travel. Yet

again it failed to get recognition for its approval. In early 2003 Boeing announced the plans to

design and sell a new “super-efficient” jet called 7E7.

The Market however was in a really bad shape due to various factors like Global terrorism, Iraq

war, Bio war resulting in intense travel situation. The leader of 7E7 project, Michael Blair

declared that Boeing was making excellent progress on the development of 7E7 and are

negotiating terms with the authorities who need planes. Blair also announced the approval from

board of Directors for the new planes design and development and the planes would be in service

from 2008. If, Boeing did not come with a new development in product then it was sure to lose

its commercial aircraft sales to its chief rival company, Airbus, and face the financial crisis.

7E7, also called, “Dreamliner”, would be capable of carrying 200-250 passengers for both short,

domestic flights as well as the long, international flights. The aircraft was expected to consume

20% less fuel and to be 10% cheaper than A330-200. Dreamliner was the first aircraft to use

carbon-reinforced composite material which would be stronger and lighter than the

conventionally used aluminum. However, composite materials were considered the cause of the

plane crash in 2001, so Boeing will have to prove the sustainability of composite materials. Also,

Boeing will have to change the production method radically if it had to use composites, which

would increase the cost of production.

Nevertheless, Boeing promised that use of composites would reduce manufacturing cost and also

the plane would be fuel efficient. To make the aircraft capable of flying both short haul and long

haul distances different wingspans for the aircrafts will be required. Engineers considered using

Snap-On wing extension. However, cost and technical feasibility was a concern for the Snap-On

wing extension consideration.

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The cost of 7E7 project development would be $10 billion approximately but the board of

directors wanted to keep the cost down to 40% of what it took to develop the 777. The board also

wanted to keep the per-copy costs to 60% of the 777 costs. Looking at all the pros and cons,

Boeing’s CEO said that it was their responsibility to develop jetliners for less and that if Boeing

didn’t take the risk in the commercial aircraft industry then it might affect their sustainability in

the market as their competitor Airbus was gaining control over the market. Airbus received 233

commercial orders as compared to Boeing’s 176 orders, representing a 57% unit market share

and an estimated 53.5% dollar value market share.

Primarily, Boeing had commercial airplanes and integrated defense systems segments. Revenues

for defense system were rising whereas there was a loss of revenue in commercial airplane

segment. The revenues from commercial aircrafts were estimated to be $22 billion in 2003,

lesser than $28 billion revenues in 2002. The commercial aircraft demand was dropped due to

September 11 attacks and hence the company reduce the production rates to half to maintain the

profitability in that segment. Boeing’s earnings had drop significantly from $2,827 million in

2001 to $492 million in 2002 because of the accounting change. The drop in commercial aircraft

deliveries from 527 in 2001 to 381 in 2002 also accorded for the loss of revenues.

Boeing’s market outlook in the short term air travel is influenced by business cycles, consumer

confidence and exogenous events but in the next 20 year the economies will grow by 3.2%

annually and air travel will grow at an average annual rate of 5.1%. Boeing forecasted 24,276

new commercial aircraft over 20 year period from 2003 to 2022 which was valued at 1.9 trillion

in 2002.

The development of new airframe meant huge initial cash outflows which should be gained back

in a decade or two. These financial constraints indicate that each aircraft was a risky proposition

keeping in mind the rigorous competition in the market. To survive in the industry, company will

have to introduce successful products and sound financial position to survive the initial cash

outflows.

The concept of B7E7 was derived from customer requirements and so was based on low

operating cost. 7E7 was considered with two models: Basic and stretch. It had wider aisles,

lower cabin altitude, increased cabin humidity, in-flight entertainment, internet access, and real-

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time airplane system and structures health monitoring and crew connectivity for better customer

satisfaction. Boeing claimed it to be the quietest aircraft in terms of takeoff and landing. Boeing

projected the demand of 2000 to 3000 aircrafts of 7E7 type in the next 20 years. However, the

demand was dependent on whether Boeing will be able to deliver the promise of fuel efficiency

and range flexibility.

Boeing faced the uncertainty of being able to deliver all the promises that I made. Also, it had the

risk of demand if Airbus duplicated it design. Boeing forecasted its IRR to be 16%. Interpolating

between 777 and 767, it was possible for Boeing to estimate value and using this method

company estimated minimum price of $114.5 million 7E7 basic model and $144.5 million for

7E7 stretch model. The forecast assumed $8 billion for development cost but the board of

directors was anxious to reduce those costs. The engineering design could push up the costs

significantly whereas; if Boeing succeeded in using composite materials then the construction

cost would reduce. The IRR of 7E7 was very sensitive to keeping production costs low. The

magnitude of risk posed by launching of a major new aircraft was accepted as a matter of course.

Michael Bair said that they can’t let what’s happening today cause them to make bad decisions

for this long business cycle and that 7E7 was very important for their future.

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Empirical Data used for Boeing 7E7 case analysis (refer Table 02)

Number of 7E7 planes delivered from year 1-20 = 2500

Number of 7E7 planes delivered from year 21-30 = 115

Initial Price of 7E7 plane as per 2008 = $135.4 million

Initial Price of 7E7 stretch planes as per 2010 = $177.7 million

Cost of Goods Sold (% Sales) = 80%

Working Capital (% Sales) = 6.70%

GS&A expenses (% Sales) = 7.50%

Inflation = 2%

Depreciation = 150%

Terminal value -Project is of limited duration = 0

R&D Expenses (% Sales) -excluding 2004 to 2007 = 2.30%

Capital expenditure (% Sales) -excluding 2004 to 2007 = 0.16%

Initial Development Costs -2004 to 2009 = $8,000.00

Year 2004 2005 2006 2007 2008 2009 Development Costs 2004 – 2009 (% of Initial development cost)

5% 15% 50% 15% 10% 5%

R&D Expenses for 2004 - 2009 (% Development Costs) = 75%

Capital expenditure 2004 - 2009 (% Development Costs) = 25%

Internal rate of return = 15.79%

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On analyzing the 7E7 project Case and the financial data given in Exhibit 1 thru Exhibit 11 of

the Darden Business Publishing Document UVA-F-1449, the following variables and their

values are calculated for the purpose of discounted cash flow analysis. – Refer Table 02

Revenue – The revenues of the company are generated from the sale of the following airplanes:

a) 7E7 Planes

b) 7E7 Stretch Planes

The initial price of a 7E7 in year 2002 is estimated to be $120.2 million after considering the

additional 5% premium paid by customers.

The initial price of a 7E7 Stretch in year 2002 is estimated to be $151.7 million after considering

the additional 5% premium paid by customers.

The revenues grow annually by the inflation rate of 2%. The analysis assumes a total of 3650

planes (2500- 7E7 & 1150 – 7E7 Stretch) to be produced over the period of the 7E7 project.

Expenses – The main expenses in this project are assumed to be the Cost of Goods sold, the

GS&A expenses, Depreciation, Research and Development expenses and the Tax expense.

The Cost of Goods Sold expense is estimated to be 80% of the Revenues generated every year.

The General, Selling and Administrative Expenses are assumed to be 7.5% of the Revenues

generated every year.

Depreciation - Cash flow analysis is performed using the accelerated depreciation method. In

this project we forecast using 150% declining balance depreciation with a 20 year asset life and

zero salvage value as the base. The cost is considered here as the Capital Expenditure. Refer

Table 06.

Research and Development (R&D) expenses – The R&D expenses from 2008 is assumed to be

2.30% every year. In the initial years of development, the R& D expenses are high, accounting to

almost 75% of the development costs for the period. (2002-2009)

The development costs are spread over a period of six years with a total budget of $ 8 Billion

(Refer Table 02).

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Tax - The amount of tax to be paid is determined by accounting the tax rate to the taxable

income.

Taxable Income = EBIT – Interest

Taxes = Tax Rate * Taxable Income.

The corporate tax rate used for analysing the 7E7 case is 35%.

Capital Expenditure (Capex) – The capital expenditure for the initial period (2004-2007) is

estimated to be 25% of the Development costs for the period. Once production starts, the Capex

is estimated to be 0.16% of Revenues.

EBIT-Earnings before Interest and Taxes are calculated by subtracting the Depreciation from

EBITDA.

EBIT = EBITDA – Depreciation

Net Working Capital – In order to forecast the Net Working Capital, we assume the Net

Working Capital to be 6.7 % of the Revenue generated or Sales.

Change in Net Working Capital - The difference in Net working capital between two

successive years.

Free Cash Flow – The free cash flow is calculated using the following formula:

F.C.F = EBIT + Depreciation – Taxes – Capex – ΔNWC

Terminal Value - It is the anticipated value of the FCF at a specified future valuation date. In

this project, we assume the terminal value to be zero, since the project is of limited duration.

In order to find the Net Present Value, the discount rate is estimated using the Weighted Average

Cost of Capital method.

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Weighted Average Cost of Capital

In this analysis, we assume the capital structure of Boeing to compose of Equity and Debt

through Bonds. Since the 7E7 is a commercial project, we need to assume the commercial share

of Boeing’s capital structure in the calculation of the WACC.

WACC= (% Debt * Rd*(1-tc)) + (% Equity *Re) …. Equation 1

Boeing's Commercial Beta Calculations !

Unlevered Beta Derivation

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The value of a firm debt can be thought of as the sum of the market value of its debt (D and

Equity (E) or the sum of its value as if unlevered (VUL) plus the benefit of the corporate debt tax

shield.

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The weighted average of the debt and equity betas should equal a weighted average of Beta.

In the analysis, the following Beta-Levered values for 60 trading months from the NYSE and S&P Index are taken:

Beta&Levered! NYSE! S&P!500!Beta!(L)!&Boeing! 1! 0.8!Beta!(L)!&Lockheed! 0.49! 0.36!Beta!(L)!&Northrop! 0.44! 0.34!

The Beta unlevered value of the Boeing Asset can be found using the below formula:

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Assumptions: Corporate Tax Rate (tc) = 35%

D/E (Boeing) = 0.525

The Debt capital structure is about 65.66% of the Total capital structure and the Equity capital

structure is about 34.34% of the Total capital structure. The weights are divided based on the

Debt/ Equity Ratio of 52.50 %.

The Beta Unlevered value for the Boeing Asset is 0.746 (NYSE) and 0.525 (S&P 500).

Being’s Defense Beta

In order to find Beta-Defense of Boeing, we first need to find the unlevered Beta values of

Lockheed and Northrop Grumman and then average out the values of Beta-Defense of Lockheed

and Beta-Defense of Northrop Grumman to estimate a Beta-Defense value for Boeing.

Note: Since Lockheed Martin and Northrop Grumman specialize in Defense, the betas of these

two companies closely represent the Beta-Defense of Boeing and this is used in the calculation

of WACC.

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Assumptions:

D/E-Lockheed =0.41

D/E-Northrop Grumman- 0.64

The unlevered Beta values for Lockheed is 0.387(NYSE) and 0.255 (S&P 500).

The unlevered Beta values for Northrop Grumman is 0.311(NYSE) and 0.207 (S&P 500).

On averaging out the Beta values of Lockheed and Northrop Grumman we estimate the Beta-

Defense of Boeing to be 0.349 (NYSE) and 0.231 (S&P 500)

Beta- Unlevered of Boeing = (Beta-Commercial * Share of Commercial) + (Beta-Defense *

Share of Defense) ……. (Equation 3)

Assumptions: Based on the revenue figures, the commercial share is assumed to be 54% and the

defense share is 46%.

On substitution in the above formula, we get the Unlevered value for Beta-Commercial to be

1.084 (NYSE) and 0.774 (S&P 500).

To find the levered –Beta value for Boeing- Commercial, re-lever using Equation 2.

The commercial Beta –Levered value is 1.453 (NYSE) and 1.181 (S&P 500)

Cost of Equity

The return on equity is calculated using the above equation. Using the below assumed values and

the derived values of Commercial Beta, the cost of commercial equity is derived.

The analysis assumes a risk free rate (Rf) of 4.56 % keeping in account the long-term effect of

the market conditions on the Boeing 7E7 project.

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! ! ! ! r!r!r! f!m!commercial!

equity!f!!!+!=! β!r!

commercial!equity!

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Assumptions:

Risk Free Rate (Rf) 4.56%

Risk Premium 8%

The cost of equity is 16.19 % (NYSE) and 14.01 % (S&P 500)

Cost of Debt In this analysis, the cost of debt is calculated using Regression Analysis, in order to achieve a

Yield to Maturity (YTM) value that is representative of the total outstanding bonds in the

company (Refer Table 04).

Using Regression Analysis (Refer Table 04), the cost of debt (Rd) is 5.54%

Calculation of WACC Substituting the below assumed values and derived values of Re and Rd in Equation 1.

Assumptions:

E/(E+D) 0.656

D/(E+D) 0.344

WACC (NYSE) = 12.52% and WACC (S&P 500) = 10.43%

WACC CALCULATION NYSE S&P 500 Beta unlevered (Boeing) 0.746 0.525

Beta unlevered (Lockheed) 0.387 0.255

Beta unlevered (Northrop) 0.311 0.207

Beta unlevered (Boeing-Defense) 0.349 0.231

Total Defense 0.160 0.106

Total Commercial 0.585 0.418

Commercial Beta unlevered 1.084 0.774

Commercial Beta levered 1.453 1.181

Cost of Equity 16.19% 14.01%

WACC 12.52% 10.43%

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The Net present value of all the Cash flows is equal to Present Value of all Cash Flows from

2004 to 2037.

We get a Net Present Value = Zero when the Internal Return Rate of 15.79% is used to

discount the free cash flows using the following formula:

PV=Annual Free Cash Flow / [(1+IRR/WACC (NYSE or S&P 500) ^Time period].

Net Present Value = PV of all Future cash flows in the period (2004-2037)

The Net Present value using the Weighted Average Cost of Capital (NYSE and S&P 500) is as

follows:

NPV (WACC NYSE) = $1765.57

NPV (WACC S&P 500) = $3571.25

Then finally the change in price / share is determined by dividing the Net Present Value (NYSE and S&P 500) by the Total number of shares (in millions)

Price/Share = Δ Total Present Value/ No. of shares

Change in stock Price (NYSE) = $2.22

Change in Stock Price (S&P 500) = $4.50

Payback period is calculated from Present values obtained using WACC (NYSE and S&P 500).

The first positive present value marks the payback period which implies the year in which the

invested money is recovered.

The payback period considering WACC (NYSE) is 17 years and WACC(S&P 500) is 15

years. Refer table 05.

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Investing in Stock Options

To order to estimate the investment opportunities for potential investors, a few stock options have been considered in this analysis:

The change in stock prices over the period of the project from 2004 thru 2037 have been derived based on the change in Present Values of Future Cash Flows of the 7E7 Project for the same period. (Refer Table 7 thru 24)

In this analysis, the strike price is assumed to be $36.41 (same as the stock price value for year 2003) and the premium per share for all the options have been fixed at $5 per share for Boeing (including defense and commercial). Since we are considering changes in stock price due to the 7E7 project alone, we take into account the commercial share of Boeings revenues and the net worth of this project in relation to the Total Net worth of the company comprising of all projects.

For this analysis, the expiration date of the option is not considered, as the purpose of the analysis is to highlight the most profitable option available for the investors.

The analysis shows that the Stock Price initially decreases (low Present Values) because of the high development and Research costs in the pre-production phase. The stock price significantly increases post 2008, once the revenues start getting generated and then gradually increases till the end of the program.

Premium per share for options related to the 7E7 project:

Premium Price (Project) = Premium (Boeing) * Commercial Share of Boeing * (Net Present Value of Project / Total Value)

NYSE Index:

Premium (Boeing) = $5

Commercial Share of Boeing = 54%

Net Present Value of Project = $1765.57

Total Value of Company = $12,571.81

Premium Price (Project) = 5 * 0.54 * (1765.57 / 12571.81)

Premium Price (Project) = $ 0.38

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S&P 500 Index:

Premium (Boeing) = $5

Commercial Share of Boeing = 54%

Net Present Value of Project = $3571.25

Total Value of Company = $12,571.81

Premium Price (Project) = 5 * 0.54 * (3571.25 / 12571.81)

Premium Price (Project) = $ 0.77

Buy Call or Long–call Option:

Strike / Exercise Price =$36.41

Pay-Off = Stock Price – Strike Price

Profit = Pay-off – Premium Paid

Refer Table 07 & Table 08 and the corresponding figures.

Expectation:

As the stock price is expected to rise continuously, this strategy is considered somewhat bullish

to normal once the production starts and is considered a decent call option barring the initial

years as depicted by the pay-off curve.

Maximum Loss:

The maximum loss is limited. It is incurred when the stock price is below the exercise / strike

price. The maximum loss in the option is the premium i.e., $ 0.38 for NYSE and $ 0.77 for S&P

500. The initial years of the project have huge expenses and without the call option, the

stockholders will incur huge losses. Once production starts, the revenues are generated and the

company will start reducing the losses and will starting making positive pay-offs in the 17th year

(NYSE) and in 15th year (S&P 500).

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Maximum Gain:

The pay-off increases continuously; the profit potential is high. In the last year of the project, the

pay-off for buying a call option for the project reaches a maximum of $ 2.22 per share (NYSE)

and $4.50 per share. (S&P 500)

Buy Put or Long–put Option:


Pay-Off = Strike Price – Stock Price

Profit = Pay-off - Premium Paid


Expectation:

As the stock price is expected to rise continuously, this strategy is considered somewhat

unsuitable once the production starts and starts making revenues. It is considered a bad option

barring the initial years as depicted by the pay-off curve.

Maximum Loss:

The maximum loss is limited. It is incurred when the stock price is above the exercise / strike

price. Once production starts, the revenues are generated and the company will start reducing the

losses and will starting making profits, the option holders will face losses with a maximum loss

in the option equal to the premium paid i.e., $ 0.38 for NYSE and $ 0.77 for S&P 500.

Maximum Gain:

The initial years of the project have huge expenses and with the put option, the option holders

will get profits. The pay-off decreases continuously; the profit potential is low. In the last few

years of the project, the pay-off for buying a put option for the project reaches a min of $ -0.38

per share (NYSE) and $-0.77 per share (S&P 500).

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Sell a Call Option:


Pay-Off = Strike Price – Stock Price

Profit = Pay-off + Premium Paid


Expectation:

As the stock price is expected to rise continuously, this strategy is considered somewhat

unsuitable once the production starts and starts making revenues. It is considered a bad option as

the writer of this stock expects the stock to fall.

Maximum Loss:

The maximum loss is unlimited. It is incurred when the stock price is above the exercise / strike

price.

Maximum Gain:

The initial years of the project has huge expenses and with the sell a call option, the writers will

get minimum profits equal to the premium received. The pay-off remains constant for a few

years and then decreases; the profit potential is low. In the last few years of the project, the pay-

off for selling a call option for the project reaches a min of $ -2.22 per share (NYSE) and $-4.50

per share (S&P 500).

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Sell a Put Option:


Pay-Off = Stock Price – Strike Price



Expectation:

As the stock price is expected to rise continuously, this strategy is considered somewhat suitable

once the production starts and starts making revenues. It is considered a decent option as the

buyer of this stock expects the stock to rise gradually and does not expect the stock to decline

remotely.

Maximum Loss:

Theoretically the loss is limited, but is very substantial. The worst that can happen is for the

stock to fall to zero, in which case the seller would buy the stocks at the strike price and sell it to

the holder. The loss would be partially offset by the premium received. In this case, the

minimum pay-off expected is $-5.44 (NYSE) and $-5.65 (S&P 500).

Maximum Gain:

The gains are limited, especially relative to the extent of risk. The stock price is above the strike

price and if the option is still open, the buyer would not exercise his option. Then the seller

would pocket the premium received. In this case, the maximum profit is $ 0.38 (NYSE) and $

0.77 (S&P 500)

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Covered Call Option:


Pay-Off = Change in Stock Price



Expectation:

The stock price is expected to be steady or slight rise. The option is not appropriate for a very

bearish or very bullish investor.

Maximum Loss:

Theoretically the loss is limited, but is very substantial. The worst that can happen is for the

stock to fall to zero, in which case the seller would buy the stocks at the strike price and sell it to

the holder. The loss would be partially offset by the premium received. In this case, the

minimum pay-off expected is $-2.90 (NYSE) and $-3.01 (S&P 500).

Maximum Gain:

The maximum gains on the strategy are very limited. The total net gains depend in part on the

call's intrinsic value when sold, and on prior unrealized stock gains or losses. In this case, the

maximum profit is $ 0.38 (NYSE) and $ 0.77 (S&P 500)

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Protective Put Option:


Pay-Off = Strike Price

Profit = Pay-off - Premium Paid


Expectation:

The stock price is expected to be rise in a long term, but the investor might have the question

whether there will be sudden drop in the initial years.

Maximum Loss:

The maximum loss is limited. The worst case scenario is if the stock to drop below the strike

price, and then the put caps the loss at that point. The loss would be partially offset by the

premium received. In this case, the minimum pay-off expected is $0 (NYSE) and $0 (S&P 500).

Maximum Gain:

The potential gains on this strategy are unlimited. The best that can happen is for the stock price

to rise to infinity. In this case, the maximum payoff is $ 38.63 (NYSE) and $ 40.91 (S&P 500).

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Protective Collar Option:


Profit = Covered Call + Protective Put


Expectation:

The stock price is expected to be rise suddenly, but the investor be worried about a sudden

decline.

Maximum Loss:

The maximum loss is limited for the term of the collar hedge. The case scenario is for the stock

price to fall below the put strike, when the put will be exercised and the stock will be sold at the

'floor' price: the put strike. In this case, the minimum profit expected is $-0.38 (NYSE) and $ -

0.77 (S&P 500).

Maximum Gain:

The maximum gain is limited for the term of the strategy. The short-term maximum gains are

reached just as the stock price rises to the call strike. In this case, the maximum profit is $ 0.38

(NYSE) and $ 0.77 (S&P 500).

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Long Straddle Option:


Profit = Call option + Put option


Expectation:

The stock price is expected to have a sharp move, in either direction, during the life of the

options.

Maximum Loss:

The maximum loss is limited to the two premiums paid. The worst case scenario is for the stock

price to hold steady and implied volatility to decline. In this case, the minimum profit expected is

$-0.38 (NYSE) and $-0.39 (S&P 500).

Maximum Gain:

The maximum gain is unlimited. The best that can happen is for the stock to make a big move in

either direction. In this case, the maximum profit is $ 4.68 (NYSE) and $ 4.68 (S&P 500).

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Short Straddle Option:


Profit = Sell a Call + Sell a Put


Expectation:

The stock price is expected to have steady stock price during the life of the options, and an even

or declining level of volatility.

Maximum Loss:

The maximum risk is unlimited. The worst case scenario is for the stock to rise to infinity, and

the next-to-worst case is for the stock to fall to zero. In this case, the minimum profit expected is

$-4.68 (NYSE) and $-4.12 (S&P 500).

Maximum Gain:

The maximum gain is limited to the premiums received at the outset. The best case scenario is

for the stock price, at expiration, to be exactly at the strike price. In this case, the maximum

profit is $ 0.38 (NYSE) and $ 0.77 (S&P 500).

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@RISK ANALYSIS

The project was evaluated using the @Risk software to find the various possibilities of outputs in the given case scenario with varying inputs. For the purpose of this project, the following were taken to be in the varying inputs for the analysis:

• The Commercial share of Boeing – 46% to 62% • The Corporate Tax Rate – 33% to 37% • The Cost of Good s Sold (as % of Sales) – 78% to 81% • Depreciation – 130% to 169% • General, Selling & Administration Expenses (as % of Sales) – 7.41% to 8.23% • Inflation – 1.5% to 3% • Initial development costs (2004 -2009) – $6000 to $10,000 • Initial Price of 7E7 (Inflated 2002- 2008) – $125.36 to $145.36 • Initial Price of 7E7 Stretch(Inflated 2002- 2010) – $167.7 to $187.7 • Premium for stock options – 2% to 9% • Premium on price for efficiency of 7E7 – 0% to 15% • Research & Development (as % of Sales) – 1.8% to 2.7% • Risk-free Rate – 3.7% to 5.4% • Working Capital (as % of Sales) – 3.5% to 11.2% • Strike Price for stock options - $32 to $40

The outputs chosen for the analysis are as follows:

• Change in Stock Price – NYSE • Payback Period – NYSE • Change in Stock Price – S&P 500 • Payback Period - S&P 500 • Call Option profit -2034 • Put Option profit -2034 • Long Straddle profit -2034 • Short Straddle profit -2034

After the analysis through @risk, we came to the following conclusions:

• The most affecting factor for Stock price change was Initial Development costs, while the same for Option profits was Cost of Goods Sold.

• There is almost 100% probability that the stock prices will have a higher value after to the implementation of the project.

• There is almost 95% probability that the invested amount can be recovered within 22 and 17 years when considering the NYSE and S&P 500 indices respectively.

!!

• Almost 100% probability of profits in Call options and 95% probability of losses in Put options show that the stock prices are expected to rise in the given scenario.

• Similarly, Almost 100% probability of profits in Long Straddle and 100% probability of losses in Short straddle show that the money invested will provide a profit only in long term.

Conclusion

As per the analysis, it is found that the Net present value of the 7E7, with the WACC from

NYSE index and the S&P 500 index is positive. The Company should expect to get a return on

the money invested by recovering the high initial research and development expenses in the 17th

year as per the NYSE index and in the 15th year as per the S&P 500 index.

As per our recommendation, based on the analysis of the case and other financials, if the board

of The Boeing Co. invests in the 7E7 project then the project would significantly increase the

stock price of the company and would be very beneficial in the long run, giving an edge over its

competitors, especially Airbus.

!!

References

Bruner, R., & Tompkins, J. (2004). The Boeing 7E7. Informally published manuscript, Darden

School of Business, University of Virginia, Charlottesville, VA , , Available from Darden

Business Publishing. Retrieved from https://store.darden.virginia.edu/business-case-

study/the-boeing-7e7-657

Options Industry Council. (n.d.). Strategies. Retrieved from

http://www.optionseducation.org/strategies_advanced_concepts/strategies.html

!

($#in#millions) 2004 2005 2006 2007 2008 2009 2010 2011 2012RevenuesPlanes#Delivered 30.00 108 64 82 84

)7E7)Planes 30.00 108 51 41 42

7E7)strech)Planes 0.00 0 13 41 42

7E7)Price 135.36$))))))) 138.07$))))))) 140.83$))))))) 143.65$))))))) 146.52$)))))))

7E7)Strech)Planes 177.74$))))))) 181.30$))))))) 184.92$)))))))

Total)Product)Revenues 4,060.94$))) 14,911.78$) 9,493.14$))) 13,322.77$) 13,920.67$)

Cost)of)goods)sold 3,248.75$))) 11,929.42$) 7,594.51$))) 10,658.22$) 11,136.54$)

Gross)profit 812.188337 2982.35557 1898.62716 2664.55449 2784.1345

Depreciation 7.50$))))))))) 29.44$)))))) 102.23$)))))))))) 117.06$))))))))) 123.77$))))))) 123.78$))))))) 115.63$))))))) 108.67$))))))) 102.86$)))))))

GS&A)Expense 304.57$))))))) 1,118.38$))) 711.99$))))))) 999.21$))))))) 1,044.05$)))

Operating)profit)(before)R&D) (7.50)$)))))))) (29.44)$)))) (102.23)$))))))))) (117.06)$)))))))) 383.85$))))))) 1,740.20$))) 1,071.01$))) 1,556.68$))) 1,637.22$)))

R&D)expense 300.00$)))) 900.00$))) 3,000.00$))))))) 900.00$))))))))) 693.40$))))))) 642.97$))))))) 218.34$))))))) 306.42$))))))) 320.18$)))))))

Pre)Tax)Profit O307.5 O929.4375 O3102.229688 O1017.062461 O309.55404 1097.2246 852.667186 1250.25241 1317.04946

Taxes()or)Tax)credit) (107.63)$))) (325.30)$)) (1,085.78)$))))) (355.97)$)))))))) (108.34)$))))) 384.03$))))))) 298.43$))))))) 437.59$))))))) 460.97$)))))))

After)Tax)profit O199.875 O604.1344 O2016.449297 O661.0905996 O201.21012 713.195987 554.233671 812.664069 856.082146

Capital)Expenditure 100.00$)))) 300.00$))) 1,000.00$))))))) 300.00$))))))))) 206.50$))))))) 123.86$))))))) 15.19$))))))))) 21.32$))))))))) 22.27$)))))))))

WCR 272.08$))))))) 999.09$))))))) 636.04$))))))) 892.63$))))))) 932.69$)))))))

Change)in)WCR 272.08$))))))) 727.01$))))))) (363.05)$))))) 256.59$))))))) 40.06$)))))))))

Annual#Free#cash#flow (292.38)$##### (874.70)$#### (2,914.22)$######## (844.03)$########## (556.02)$####### (13.89)$########## 1,017.73$##### 643.43$######### 896.61$#########0 1 2 3 4 5 6 7 8

Present#value#using#IRR (292.38)$))))) (755.45)$)))) (2,173.81)$)))))))) (543.76)$)))))))))) (309.38)$)))))))) (6.68)$)))))))))))) 422.40$))))))))) 230.65$))))))))) 277.59$)))))))))

Net)Present)value 0.19$)))))))))

Present#value#using#WACC#(NYSE) (292.38)$))))) (777.35)$)))) (2,301.66)$)))))))) (592.43)$)))))))))) (346.84)$)))))))) (7.70)$)))))))))))) 501.40$))))))))) 281.72$))))))))) 348.88$)))))))))

Net)Present)value 1,765.57$)

Change#in#Stock#price 2.22$########### 17

Present#value#using#WACC#(S&P#500) (292.38)$))))) (792.11)$)))) (2,389.89)$)))))))) (626.82)$)))))))))) (373.94)$)))))))) (8.46)$)))))))))))) 561.31$))))))))) 321.37$))))))))) 405.53$)))))))))

Net)Present)value 3,571.25$)

Change#in#Stock#price 4.50$########### 15

Payback#Period#(NYSE)Tyears

Payback#Period#(S&P#500)Tyears

Table:#01

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

104 136 119 185 192 219 165 149 108 115 119 136 150 120 115 115 11552 68 60 93 96 110 83 75 54 58 60 68 75 60 58 58 5852 68 59 92 96 109 82 74 54 57 59 68 75 60 57 57 57

149.45$))))))) 152.44$))))))) 155.49$))))))) 158.60$))))))) 161.77$))))))) 165.01$))))))) 168.31$))))))) 171.68$))))))) 175.11$))))))) 178.61$))))))) 182.18$))))))) 185.83$))))))) 189.54$))))))) 193.33$))))))) 197.20$))))))) 201.14$))))))) 205.17$)))))))188.62$))))))) 192.39$))))))) 196.24$))))))) 200.16$))))))) 204.17$))))))) 208.25$))))))) 212.42$))))))) 216.66$))))))) 221.00$))))))) 225.42$))))))) 229.93$))))))) 234.53$))))))) 239.22$))))))) 244.00$))))))) 248.88$))))))) 253.86$))))))) 258.93$)))))))

17,579.82$) 23,448.78$) 20,907.66$) 33,165.10$) 35,130.39$) 40,850.40$) 31,387.81$) 28,908.85$) 21,389.78$) 23,208.27$) 24,496.65$) 28,583.93$) 32,156.92$) 26,240.05$) 25,623.80$) 26,136.28$) 26,659.01$)14,063.86$) 18,759.02$) 16,726.13$) 26,532.08$) 28,104.31$) 32,680.32$) 25,110.25$) 23,127.08$) 17,111.82$) 18,566.62$) 19,597.32$) 22,867.14$) 25,725.53$) 20,992.04$) 20,499.04$) 20,909.02$) 21,327.21$)3515.96413 4689.75524 4181.53169 6633.01974 7026.07874 8170.07921 6277.56233 5781.76933 4277.95514 4641.65388 4899.33083 5716.78547 6431.38365 5248.00906 5124.76094 5227.25616 5331.80129

99.71$))))))))) 100.06$))))))) 100.97$))))))) 103.89$))))))) 107.12$))))))) 110.85$))))))) 113.24$))))))) 115.23$))))))) 116.27$))))))) 117.58$))))))) 119.07$))))))) 116.67$))))))) 105.82$))))))) 63.08$))))))))) 51.49$))))))))) 44.14$))))))))) 40.51$)))))))))1,318.49$))) 1,758.66$))) 1,568.07$))) 2,487.38$))) 2,634.78$))) 3,063.78$))) 2,354.09$))) 2,168.16$))) 1,604.23$))) 1,740.62$))) 1,837.25$))) 2,143.79$))) 2,411.77$))) 1,968.00$))) 1,921.79$))) 1,960.22$))) 1,999.43$)))2,097.77$))) 2,831.04$))) 2,512.48$))) 4,041.75$))) 4,284.18$))) 4,995.45$))) 3,810.24$))) 3,498.38$))) 2,557.45$))) 2,783.46$))) 2,943.01$))) 3,456.32$))) 3,913.79$))) 3,216.92$))) 3,151.48$))) 3,222.89$))) 3,291.86$)))404.34$))))))) 539.32$))))))) 480.88$))))))) 762.80$))))))) 808.00$))))))) 939.56$))))))) 721.92$))))))) 664.90$))))))) 491.96$))))))) 533.79$))))))) 563.42$))))))) 657.43$))))))) 739.61$))))))) 603.52$))))))) 589.35$))))))) 601.13$))))))) 613.16$)))))))

1693.43604 2291.71938 2031.60779 3278.94884 3476.18113 4055.89165 3088.32125 2833.47552 2065.48614 2249.66756 2379.58745 2798.89182 3174.18077 2613.40099 2562.13398 2621.75951 2678.70567592.70$))))))) 802.10$))))))) 711.06$))))))) 1,147.63$))) 1,216.66$))) 1,419.56$))) 1,080.91$))) 991.72$))))))) 722.92$))))))) 787.38$))))))) 832.86$))))))) 979.61$))))))) 1,110.96$))) 914.69$))))))) 896.75$))))))) 917.62$))))))) 937.55$)))))))

1100.73343 1489.6176 1320.54506 2131.31675 2259.51774 2636.32958 2007.40881 1841.75909 1342.56599 1462.28391 1546.73184 1819.27968 2063.2175 1698.71065 1665.38709 1704.14368 1741.1586928.13$))))))))) 37.52$))))))))) 33.45$))))))))) 53.06$))))))))) 56.21$))))))))) 65.36$))))))))) 50.22$))))))))) 46.25$))))))))) 34.22$))))))))) 37.13$))))))))) 39.19$))))))))) 45.73$))))))))) 51.45$))))))))) 41.98$))))))))) 41.00$))))))))) 41.82$))))))))) 42.65$)))))))))

1,177.85$))) 1,571.07$))) 1,400.81$))) 2,222.06$))) 2,353.74$))) 2,736.98$))) 2,102.98$))) 1,936.89$))) 1,433.11$))) 1,554.95$))) 1,641.28$))) 1,915.12$))) 2,154.51$))) 1,758.08$))) 1,716.79$))) 1,751.13$))) 1,786.15$)))245.16$))))))) 393.22$))))))) (170.25)$))))) 821.25$))))))) 131.67$))))))) 383.24$))))))) (633.99)$))))) (166.09)$))))) (503.78)$))))) 121.84$))))))) 86.32$))))))))) 273.85$))))))) 239.39$))))))) (396.43)$))))) (41.29)$)))))))) 34.34$))))))))) 35.02$)))))))))927.15$######### 1,158.94$##### 1,558.32$##### 1,360.90$##### 2,178.75$##### 2,298.58$##### 2,704.42$##### 2,076.82$##### 1,928.39$##### 1,420.89$##### 1,540.29$##### 1,616.37$##### 1,878.20$##### 2,116.24$##### 1,717.17$##### 1,672.13$##### 1,703.99$#####

9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25247.91$))))))))) 267.64$))))))))) 310.81$))))))))) 234.43$))))))))) 324.15$))))))))) 295.36$))))))))) 300.13$))))))))) 199.06$))))))))) 159.64$))))))))) 101.59$))))))))) 95.11$))))))))))) 86.20$))))))))))) 86.51$))))))))))) 84.19$))))))))))) 59.00$))))))))))) 49.62$))))))))))) 43.67$)))))))))))

320.61$))))))))) 356.17$))))))))) 425.61$))))))))) 330.32$))))))))) 469.98$))))))))) 440.65$))))))))) 460.75$))))))))) 314.45$))))))))) 259.48$))))))))) 169.91$))))))))) 163.69$))))))))) 152.66$))))))))) 157.65$))))))))) 157.86$))))))))) 113.84$))))))))) 98.51$))))))))))) 89.22$)))))))))))

379.75$))))))))) 429.87$))))))))) 523.44$))))))))) 413.96$))))))))) 600.17$))))))))) 573.39$))))))))) 610.93$))))))))) 424.86$))))))))) 357.25$))))))))) 238.38$))))))))) 234.01$))))))))) 222.38$))))))))) 234.01$))))))))) 238.77$))))))))) 175.45$))))))))) 154.72$))))))))) 142.78$)))))))))

Table:#01 Table:#01

2030 2031 2032 2033 2034 2035 2036 2037

115 115 115 115 115 115 115 11558 58 58 58 58 58 58 5857 57 57 57 57 57 57 57

209.27$))))))) 213.46$))))))) 217.73$))))))) 222.08$))))))) 226.52$))))))) 231.05$))))))))) 235.67$))))))))) 240.39$)))))))264.11$))))))) 269.40$))))))) 274.78$))))))) 280.28$))))))) 285.88$))))))) 291.60$))))))))) 297.43$))))))))) 303.38$)))))))

27,192.19$) 27,736.03$) 28,290.75$) 28,856.57$) 29,433.70$) 30,022.37$)))) 30,622.82$))) 31,235.27$)21,753.75$) 22,188.82$) 22,632.60$) 23,085.25$) 23,546.96$) 24,017.90$)))) 24,498.25$))) 24,988.22$)5438.43731 5547.20606 5658.15018 5771.31318 5886.73945 6004.474236 6124.563721 6247.055

41.78$))))))))) 42.83$))))))))) 43.91$))))))))) 44.80$))))))))) 45.33$))))))))) 46.07$))))))))))) 45.99$))))))))))) 45.82$)))))))))2,039.41$))) 2,080.20$))) 2,121.81$)))) 2,164.24$))) 2,207.53$))) 2,251.68$)))))) 2,296.71$))))) 2,342.65$)))3,357.25$))) 3,424.18$))) 3,492.44$)))) 3,562.27$))) 3,633.89$))) 3,706.72$)))))) 3,781.86$))))) 3,858.59$)))625.42$))))))) 637.93$))))))) 650.69$))))))) 663.70$))))))) 676.98$))))))) 690.51$))))))))) 704.32$))))))))) 718.41$)))))))

2731.82623 2786.24956 2841.74908 2898.56743 2956.9112 3016.207198 3077.533408 3140.17899956.14$))))))) 975.19$))))))) 994.61$))))))) 1,014.50$))) 1,034.92$))) 1,055.67$)))))) 1,077.14$))))) 1,099.06$)))

1775.68705 1811.06222 1847.1369 1884.06883 1921.99228 1960.534679 2000.396715 2041.1163443.51$))))))))) 44.38$))))))))) 45.27$))))))))) 46.17$))))))))) 47.09$))))))))) 48.04$))))))))))) 49.00$))))))))))) 49.98$)))))))))

1,821.88$))) 1,858.31$))) 1,895.48$)))) 1,933.39$))) 1,972.06$))) 2,011.50$)))))) 2,051.73$))))) 2,092.76$)))35.72$))))))))) 36.44$))))))))) 37.17$))))))))) 37.91$))))))))) 38.67$))))))))) 39.44$))))))))))) 40.23$))))))))))) 41.03$)))))))))

1,738.23$##### 1,773.07$##### 1,808.61$###### 1,844.79$##### 1,881.56$##### 1,919.13$######## 1,957.16$####### 1,995.92$#####26 27 28 29 30 31 32 33

38.48$))))))))))) 33.90$))))))))))) 29.86$))))))))))) 26.31$))))))))))) 23.17$))))))))))) 20.41$)))))))))))))) 17.98$))))))))))))) 15.84$)))))))))))

80.88$))))))))))) 73.32$))))))))))) 66.47$))))))))))) 60.25$))))))))))) 54.61$))))))))))) 49.50$)))))))))))))) 44.87$))))))))))))) 40.66$)))))))))))

131.90$))))))))) 121.84$))))))))) 112.55$))))))))) 103.96$))))))))) 96.02$))))))))))) 88.69$)))))))))))))) 81.91$))))))))))))) 75.64$)))))))))))

Table:#01

($#in#millions) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018Planes'Delivered 30 108 64 82 84 104 136 119 185 192 2197E7#planes 30 108 51 41 42 52 68 60 93 96 1107E7#Stretch#planes 0 0 13 41 42 52 68 59 92 96 109

Initial#Price#of#7E7#(inflated#2002#B#2008) 120.2 122.604 125.1 127.6 130.1 132.7 135.4Initial#Price#of#7E7#Stretch#(#inflated#2002#B#2010) 151.7 154.734 157.8 161 164.2 167.5 170.8 174.26 177.7Actual#Price#(7E7#&#7E7#Stretch) 114.48$# ######Price#Premium 5%Cost#of#Goods#Sold#(%#Sales) 80%Working#Capital#(%#Sales) 6.70%GS&A#expenses#(%#Sales) 7.50% 5.00$''Inflation 2% #####Depreciation 150%Terminal#value#BProject#is#of#limited#duration 0

R&D#Expenses#(#%#Sales)#Bexcluding#2004#to#2007 2.30%Capex#(#%#Sales)#Bexcluding#2004#to#2007 0.16%Initial#Development#Costs#B2004#to#2009 $8,000Total#No.#of#Planes:#Yrs#1B20 2500Total#No.#of#Planes:#Yrs#20B30 1150Corporate#Tax#Rate# 35%

2004 2005 2006 2007 2008 2009

Development#Costs#2004#B#2009(%#of#Initial#development#cost) 5% 15% 50% 15% 10% 5%R&D#Expenses#for#2004#B#2009#(#%#Development#Costs)# 75% 75% 75% 75% 75% 75%Capex#2004#B#2009#(#%#Development#Costs) 25% 25% 25% 25% 25% 25%Internal#rate#of#return 15.78%

PremiumStrike#Price

Table:'02

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037165 149 108 115 119 136 150 120 115 115 115 115 115 115 115 115 115 115 11583 75 54 58 60 68 75 60 58 58 58 58 58 58 58 58 58 58 5882 74 54 57 59 68 75 60 57 57 57 57 57 57 57 57 57 57 57

Table:'02

Regression)StatisticsMultiple(R 0.093909401R(Square 0.008818976Adjusted(R(Square ;0.06197967Standard(Error 0.010860886Observations 16ANOVA

df SS MS F Significance)FRegression 1 1.46934E;05 1.47E;05 0.124564 0.729393452Residual 14 0.001651424 0.000118Total 15 0.001666117

Coefficients Standard)Error t)Stat P5value Lower)95% Upper)95% Lower)95.0% Upper)95.0%Intercept 0.055443929 0.00668773 8.290396 9.02E;07 0.041100175 0.0697877 0.04110018 0.069787684X(Variable(1 ;7.9743E;06 2.25942E;05 ;0.35294 0.729393 ;5.6434E;05 4.049E;05 ;5.643E;05 4.04854E;05

Observation Predicted)Y Residuals Percentile Y1 0.053833116 ;0.014723116 3.125 0.033932 0.053067581 ;0.019137581 9.375 0.034753 0.053458323 ;0.018708323 15.625 0.039114 0.054048423 ;0.013558423 21.875 0.040495 0.052660891 0.002039109 28.125 0.046576 0.050683258 ;0.004113258 34.375 0.05477 0.052270149 0.010119851 40.625 0.057328 0.053051632 0.004268368 46.875 0.057779 0.053474272 0.006995728 53.125 0.0580510 0.053458323 0.009911677 59.375 0.058511 0.054064372 0.003985628 65.625 0.0604712 0.05231002 0.00618998 71.875 0.0615313 0.053051632 0.008478368 78.125 0.0617314 0.054646497 0.007083503 84.375 0.0619115 0.054064372 0.003705628 90.625 0.0623916 0.054447139 0.007462861 96.875 0.06337

SUMMARY5OUTPUT

PROBABILITY5OUTPUTRESIDUAL5OUTPUT

Table:503

;0.03(

;0.02(

;0.01(

0(

0.01(

0.02(

0( 100( 200( 300( 400( 500( 600( 700(

Residu

als5

X5Variable515

X5Variable5155Residual5Plot5

0.00%(10.00%(0( 200( 400( 600( 800(

Y5

X5Variable515

X5Variable515Line5Fit55Plot5Y(

Predicted(Y(

0(

0.01(

0.02(

0.03(

0.04(

0.05(

0.06(

0.07(

0( 20( 40( 60( 80( 100( 120(

Y5

Sample5PercenKle5

Normal5Probability5Plot5

Debt% YTM% Weighted%ratio202 3.91% 7.90

298 3.39% 10.11

249 3.48% 8.65

175 4.05% 7.09

349 5.47% 19.09

597 4.66% 27.80

398 6.24% 24.83

300 5.73% 17.20

247 6.05% 14.94

249 6.34% 15.78

173 5.81% 10.04

393 5.85% 22.99

300 6.15% 18.46

100 6.17% 6.17

173 5.78% 9.99

125 6.19% 7.74

4328 228.78Debt1 4,328.00$1111111111

YTM1(Weighted) 5.29%

Cost%of%Debt%(Rd) 5.54%(D/E)@Boeing 0.525(D/E)@Lockheed 0.41(D/E)@Northrop 0.64VL=1D1+1E 12,571.81$1111111

Vul=VL@Tc1*D 11,057.01$1111111

BetaCLevered NYSE S&P%500Beta1(L)1@Boeing 1 0.8

Beta1(L)1@Lockheed 0.49 0.36

Beta1(L)1@Northrop 0.44 0.34

Risk@Free1Rate1(Rf) 4.56%

Risk1Premium 8%

Defense1Share 46%

Commercial1Share 54%

E/(E+D) 0.656

D/(E+D) 0.344

Net1Earnings 492.00$1111111111111

Earnings1per1share1 0.62$11111111111111111

No.1of1Shares(million) 793.55

($%in%millions)

Table:%04

NYSE S&P%500

0.746 0.525

0.387 0.255

0.311 0.207

0.349 0.231

0.160 0.106

0.585 0.418

1.084 0.774

1.453 1.181

16.19% 14.01%

12.52% 10.43%

BetaCLevered=%BetaCUnlevered*(1+(1CTc)*D/E)%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%BetaCUnlevered=(BetaCCommercial*Share%of%

Commercial)+(BetaCDefence*Share%of%Defense)%Note:%To%find%BetaCDefence%of%Boeing,take%average%of%BetaCDefence%of%Lockheed%and%BetaCDefence%of%

Northrop%Grumman

Beta@Unlevered1(Northrop)

1Beta@Unlevered1(Boeing@Defense)

WACC%Calculation

Table:%04

Total1Defense

Beta@Unlevered1(Boeing)

Beta@Unlevered1(Lockheed)

WACC

Total1Commercial

Comm.1Beta1Unlevered

Comm.%Beta%Levered

Cost%of%equity

(292.38)$)) (777.35)$))))) (2,301.66)$) (592.43)$))))) (346.84)$))))) (7.70)$))))))))) 501.40$))))))(292.38)$)) (1,069.73)$) (3,371.38)$) (3,963.81)$) (4,310.65)$) (4,318.35)$) (3,816.95)$)

2004 2005 2006 2007 2008 2009 2010191.662021

17

(292.38)$)) (792.11)$))))) (2,389.89)$) (626.82)$))))) (373.94)$))))) (8.46)$))))))))) 561.31$))))))(292.38)$)) (1,084.49)$) (3,474.38)$) (4,101.20)$) (4,475.14)$) (4,483.60)$) (3,922.29)$)

2004 2005 2006 2007 2008 2009 2010336.13088

201915

Year/in/which/Initial/Development/Payback/Period(years)

Present/value/using/WACC/(NYSE)

Project)Forecast)YearsFirst/Profit

Table:/05

Present/value/using/WACC/(S&P/500)

Project)Forecast)Years)First/Profit

Year/in/which/Initial/Development/Payback/Period(years)

281.72$)))))) 348.88$)))))) 320.61$)))))) 356.17$)))))) 425.61$)))))) 330.32$)))))) 469.98$))))))) 440.65$))) 460.75$))) 314.45$))(3,535.23)$) (3,186.35)$) (2,865.73)$) (2,509.57)$) (2,083.96)$) (1,753.64)$) (1,283.66)$)) (843.01)$)) (382.27)$)) (67.82)$)))

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

321.37$)))))) 405.53$)))))) 379.75$)))))) 429.87$)))))) 523.44$)))))) 413.96$)))))) 600.17$))))))) 573.39$))) 610.93$))) 424.86$))(3,600.93)$) (3,195.39)$) (2,815.64)$) (2,385.77)$) (1,862.33)$) (1,448.36)$) (848.20)$))))) (274.80)$)) 336.13$))) 760.99$))

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Table:/05

259.48$))))) 169.91$))))) 163.69$))))) 152.66$))))) 157.65$))))) 157.86$))))) 113.84$))))) 98.51$))))))) 89.22$))))))) 80.88$)))))))191.66$))))) 361.58$))))) 525.27$))))) 677.93$))))) 835.58$))))) 993.43$))))) 1,107.27$)) 1,205.78$)) 1,295.00$)) 1,375.88$))

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

357.25$))))) 238.38$))))) 234.01$))))) 222.38$))))) 234.01$))))) 238.77$))))) 175.45$))))) 154.72$))))) 142.78$))))) 131.90$)))))1,118.24$)) 1,356.62$)) 1,590.63$)) 1,813.01$)) 2,047.02$)) 2,285.79$)) 2,461.25$)) 2,615.96$)) 2,758.75$)) 2,890.64$))

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Table:/05

73.32$))))))) 66.47$))))))) 60.25$))))))) 54.61$))))))) 49.50$))))))) 44.87$))))))) 40.66$)))))))1,449.20$)) 1,515.67$)) 1,575.92$)) 1,630.53$)) 1,680.04$)) 1,724.91$)) 1,765.57$))

2031 2032 2033 2034 2035 2036 2037

121.84$))))) 112.55$))))) 103.96$))))) 96.02$))))))) 88.69$))))))) 81.91$))))))) 75.64$)))))))3,012.48$)) 3,125.03$)) 3,228.99$)) 3,325.01$)) 3,413.70$)) 3,495.60$)) 3,571.25$))

2031 2032 2033 2034 2035 2036 2037

Table:/05

0 1 2 3 4 5 6 7 8 9Capital1Expenditure 100.00$11 300.00$11 1,000.00$11 300.00$11 206.50$11 123.86$11 15.19$1111 21.32$1111 22.27$1111

2004 2005 2006 2007 2008 2009 2010 2011 2012Depreciation 7.50$000000 29.44$0000 102.23$00000 117.06$0 123.77$0 123.78$0 115.63$0 108.67$0 102.86$0

1 $100.00 7.50$111111 6.94$111111 6.42$1111111111 5.94$111111 5.49$111111 5.08$111111 4.70$111111 4.46$111111 4.46$1111112 $300.00 22.50$1111 20.81$11111111 19.25$1111 17.81$1111 16.47$1111 15.24$1111 14.09$1111 13.37$11113 $1,000.00 75.00$11111111 69.38$1111 64.17$1111 59.36$1111 54.91$1111 50.79$1111 46.98$11114 $300.00 22.50$1111 20.81$1111 19.25$1111 17.81$1111 16.47$1111 15.24$11115 $206.50 15.49$1111 14.33$1111 13.25$1111 12.26$1111 11.34$11116 $123.86 9.29$111111 8.59$111111 7.95$111111 7.35$1111117 $15.19 1.14$111111 1.05$111111 0.97$1111118 $21.32 1.60$111111 1.48$1111119 $22.27 1.67$11111110 $28.1311 $37.5212 $33.4513 $53.0614 $56.2115 $65.3616 $50.2217 $46.2518 $34.2219 $37.1320 $39.1921 $45.7322 $51.4523 $41.9824 $41.0025 $41.8226 $42.6527 $43.5128 $44.3829 $45.2730 $46.1731 $47.0932 $48.0433 $49.0034 $49.98

Table:006

10 11 12 13 14 15 16 17 18 19 20 21 2228.13$11 37.52$1111 33.45$1111 53.06$1111 56.21$1111 65.36$1111 50.22$1111 46.25$1111 34.22$1111 37.13$1111 39.19$1111 45.73$1111 51.45$1111

2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 202599.71$00 100.06$0 100.97$0 103.89$0 107.12$0 110.85$0 113.24$0 115.23$0 116.27$0 117.58$0 119.07$0 116.67$0 105.82$04.46$11111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111 4.46$111111

13.37$11 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$111144.57$11 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$1111 44.57$111114.09$11 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$1111 13.37$111110.49$11 9.70$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$111111 9.20$1111116.80$11111 6.29$111111 5.82$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$111111 5.52$1111110.90$11111 0.83$111111 0.77$111111 0.71$111111 0.68$111111 0.68$111111 0.68$111111 0.68$111111 0.68$111111 0.68$111111 0.68$111111 0.68$111111 0.68$1111111.37$11111 1.27$111111 1.17$111111 1.08$111111 1.00$111111 0.95$111111 0.95$111111 0.95$111111 0.95$111111 0.95$111111 0.95$111111 0.95$111111 0.95$1111111.55$11111 1.43$111111 1.32$111111 1.22$111111 1.13$111111 1.05$111111 0.99$111111 0.99$111111 0.99$111111 0.99$111111 0.99$111111 0.99$111111 0.99$1111112.11$11111 1.95$111111 1.81$111111 1.67$111111 1.54$111111 1.43$111111 1.32$111111 1.25$111111 1.25$111111 1.25$111111 1.25$111111 1.25$111111 1.25$111111

2.81$111111 2.60$111111 2.41$111111 2.23$111111 2.06$111111 1.91$111111 1.76$111111 1.67$111111 1.67$111111 1.67$111111 1.67$111111 1.67$1111112.51$111111 2.32$111111 2.15$111111 1.99$111111 1.84$111111 1.70$111111 1.57$111111 1.49$111111 1.49$111111 1.49$111111 1.49$111111

3.98$111111 3.68$111111 3.41$111111 3.15$111111 2.91$111111 2.70$111111 2.49$111111 2.37$111111 2.37$111111 2.37$1111114.22$111111 3.90$111111 3.61$111111 3.34$111111 3.09$111111 2.85$111111 2.64$111111 2.51$111111 2.51$111111

4.90$111111 4.53$111111 4.19$111111 3.88$111111 3.59$111111 3.32$111111 3.07$111111 2.91$1111113.77$111111 3.48$111111 3.22$111111 2.98$111111 2.76$111111 2.55$111111 2.36$111111

3.47$111111 3.21$111111 2.97$111111 2.75$111111 2.54$111111 2.35$1111112.57$111111 2.37$111111 2.20$111111 2.03$111111 1.88$111111

2.78$111111 2.58$111111 2.38$111111 2.20$1111112.94$111111 2.72$111111 2.52$111111

3.43$111111 3.17$1111113.86$111111

Table:006

23 24 25 26 27 28 29 30 31 32 33 3441.98$11 41.00$11 41.82$11 42.65$11 43.51$11 44.38$11 45.27$11 46.17$11 47.09$11 48.04$11 49.00$11 49.98$11

2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 203763.08$00 51.49$00 44.14$00 40.51$00 41.78$00 42.83$00 43.91$00 44.80$00 45.33$00 46.07$00 45.99$00 45.82$00

13.37$119.20$11111 9.20$111115.52$11111 5.52$11111 5.52$111110.68$11111 0.68$11111 0.68$11111 0.68$111110.95$11111 0.95$11111 0.95$11111 0.95$11111 0.95$111110.99$11111 0.99$11111 0.99$11111 0.99$11111 0.99$11111 0.99$111111.25$11111 1.25$11111 1.25$11111 1.25$11111 1.25$11111 1.25$11111 1.25$111111.67$11111 1.67$11111 1.67$11111 1.67$11111 1.67$11111 1.67$11111 1.67$11111 1.67$111111.49$11111 1.49$11111 1.49$11111 1.49$11111 1.49$11111 1.49$11111 1.49$11111 1.49$11111 1.49$111112.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$11111 2.37$111112.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$11111 2.51$111112.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$11111 2.91$111112.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$11111 2.24$111112.17$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$11111 2.06$111111.74$11111 1.61$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$11111 1.53$111112.04$11111 1.89$11111 1.74$11111 1.66$11111 1.66$11111 1.66$11111 1.66$11111 1.66$11111 1.66$11111 1.66$11111 1.66$11111 1.66$111112.33$11111 2.15$11111 1.99$11111 1.84$11111 1.75$11111 1.75$11111 1.75$11111 1.75$11111 1.75$11111 1.75$11111 1.75$11111 1.75$111112.93$11111 2.71$11111 2.51$11111 2.32$11111 2.15$11111 2.04$11111 2.04$11111 2.04$11111 2.04$11111 2.04$11111 2.04$11111 2.04$111113.57$11111 3.30$11111 3.05$11111 2.83$11111 2.61$11111 2.42$11111 2.29$11111 2.29$11111 2.29$11111 2.29$11111 2.29$11111 2.29$111113.15$11111 2.91$11111 2.69$11111 2.49$11111 2.31$11111 2.13$11111 1.97$11111 1.87$11111 1.87$11111 1.87$11111 1.87$11111 1.87$11111

3.07$11111 2.84$11111 2.63$11111 2.43$11111 2.25$11111 2.08$11111 1.93$11111 1.83$11111 1.83$11111 1.83$11111 1.83$111113.14$11111 2.90$11111 2.68$11111 2.48$11111 2.30$11111 2.12$11111 1.96$11111 1.86$11111 1.86$11111 1.86$11111

3.20$11111 2.96$11111 2.74$11111 2.53$11111 2.34$11111 2.17$11111 2.00$11111 1.90$11111 1.90$111113.26$11111 3.02$11111 2.79$11111 2.58$11111 2.39$11111 2.21$11111 2.04$11111 1.94$11111

3.33$11111 3.08$11111 2.85$11111 2.63$11111 2.44$11111 2.25$11111 2.08$111113.39$11111 3.14$11111 2.90$11111 2.69$11111 2.49$11111 2.30$11111

3.46$11111 3.20$11111 2.96$11111 2.74$11111 2.54$111113.53$11111 3.27$11111 3.02$11111 2.80$11111

3.60$11111 3.33$11111 3.08$111113.67$11111 3.40$11111

$3.75

Table:006

Strike'Price'per'share

36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''

Premium'per'share'(Com.)

($0.38)

Change'in'Present'Value

Change'in'Share'Price

Stock'price'fluctuations Payoff Profit

Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.37)$''''''''''' (0.75)$''''' (0.38)$'''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' (1.35)$''''''''''' (1.73)$''''' (0.38)$'''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' (4.25)$''''''''''' (4.63)$''''' (0.38)$'''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' (5.00)$''''''''''' (5.37)$''''' (0.38)$'''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' (5.43)$''''''''''' (5.81)$''''' (0.38)$'''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' (5.44)$''''''''''' (5.82)$''''' (0.38)$'''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' (4.81)$''''''''''' (5.19)$''''' (0.38)$'''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' (4.45)$''''''''''' (4.83)$''''' (0.38)$'''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' (4.02)$''''''''''' (4.39)$''''' (0.38)$'''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' (3.61)$''''''''''' (3.99)$''''' (0.38)$'''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' (3.16)$''''''''''' (3.54)$''''' (0.38)$'''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' (2.63)$''''''''''' (3.01)$''''' (0.38)$'''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' (2.21)$''''''''''' (2.59)$''''' (0.38)$'''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' (1.62)$''''''''''' (2.00)$''''' (0.38)$'''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' (1.06)$''''''''''' (1.44)$''''' (0.38)$'''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' (0.48)$''''''''''' (0.86)$''''' (0.38)$'''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' (0.09)$''''''''''' (0.46)$''''' (0.38)$'''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' 0.24$'''''''''''' (0.14)$''''' (0.14)$'''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' 0.46$'''''''''''' 0.08$'''''' 0.08$''''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' 0.66$'''''''''''' 0.28$'''''' 0.28$''''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' 0.85$'''''''''''' 0.48$'''''' 0.48$''''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' 1.05$'''''''''''' 0.67$'''''' 0.67$''''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' 1.25$'''''''''''' 0.87$'''''' 0.87$''''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' 1.40$'''''''''''' 1.02$'''''' 1.02$''''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' 1.52$'''''''''''' 1.14$'''''' 1.14$''''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' 1.63$'''''''''''' 1.25$'''''' 1.25$''''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' 1.73$'''''''''''' 1.35$'''''' 1.35$''''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' 1.83$'''''''''''' 1.45$'''''' 1.45$''''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' 1.91$'''''''''''' 1.53$'''''' 1.53$''''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' 1.99$'''''''''''' 1.61$'''''' 1.61$''''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' 2.05$'''''''''''' 1.68$'''''' 1.68$''''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' 2.12$'''''''''''' 1.74$'''''' 1.74$''''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' 2.17$'''''''''''' 1.79$'''''' 1.79$''''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' 2.22$'''''''''''' 1.85$'''''' 1.85$''''''

Call'Option'1'NYSE

Table:'07

'$(7.00)'

'$(6.00)'

'$(5.00)'

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$H''''

'$1.00''

'$2.00''

'$3.00''

1' 3' 5' 7' 9' 11' 13' 15' 17' 19' 21' 23' 25' 27' 29' 31' 33'

Call'Op<on'1'NYSE'

Change'in'Share'Price'

Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


($0.77)




Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.37)$'''''''' (1.14)$''''''' (0.77)$'''''(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' (1.37)$'''''''' (2.13)$''''''' (0.77)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' (4.38)$'''''''' (5.15)$''''''' (0.77)$'''''(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' (5.17)$'''''''' (5.94)$''''''' (0.77)$'''''(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' (5.64)$'''''''' (6.41)$''''''' (0.77)$'''''(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' (5.65)$'''''''' (6.42)$''''''' (0.77)$'''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' (4.94)$'''''''' (5.71)$''''''' (0.77)$'''''321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' (4.54)$'''''''' (5.30)$''''''' (0.77)$'''''405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' (4.03)$'''''''' (4.79)$''''''' (0.77)$'''''379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' (3.55)$'''''''' (4.32)$''''''' (0.77)$'''''429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' (3.01)$'''''''' (3.77)$''''''' (0.77)$'''''523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' (2.35)$'''''''' (3.11)$''''''' (0.77)$'''''413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' (1.83)$'''''''' (2.59)$''''''' (0.77)$'''''600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' (1.07)$'''''''' (1.84)$''''''' (0.77)$'''''573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' (0.35)$'''''''' (1.11)$''''''' (0.77)$'''''610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' 0.42$''''''''' (0.34)$''''''' (0.34)$'''''424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' 0.96$''''''''' 0.19$'''''''' 0.19$''''''357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' 1.41$''''''''' 0.64$'''''''' 0.64$''''''238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' 1.71$''''''''' 0.94$'''''''' 0.94$''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' 2.00$''''''''' 1.24$'''''''' 1.24$''''''222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' 2.28$''''''''' 1.52$'''''''' 1.52$''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' 2.58$''''''''' 1.81$'''''''' 1.81$''''''238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' 2.88$''''''''' 2.11$'''''''' 2.11$''''''175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' 3.10$''''''''' 2.33$'''''''' 2.33$''''''154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' 3.30$''''''''' 2.53$'''''''' 2.53$''''''142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' 3.48$''''''''' 2.71$'''''''' 2.71$''''''131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' 3.64$''''''''' 2.88$'''''''' 2.88$''''''121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' 3.80$''''''''' 3.03$'''''''' 3.03$''''''112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' 3.94$''''''''' 3.17$'''''''' 3.17$''''''103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' 4.07$''''''''' 3.30$'''''''' 3.30$''''''96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' 4.19$''''''''' 3.42$'''''''' 3.42$''''''88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' 4.30$''''''''' 3.53$'''''''' 3.53$''''''81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' 4.41$''''''''' 3.64$'''''''' 3.64$''''''75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' 4.50$''''''''' 3.73$'''''''' 3.73$''''''

Call'Option'1'S&P'500

Table:'08

'$(8.00)'

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Call'Op<on'1'S&P'500'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


($0.38)




Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$'''''''''' (0.01)$'''''''' (0.01)$'''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 1.35$'''''''''' 0.97$'''''''''' 0.97$''''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 4.25$'''''''''' 3.87$'''''''''' 3.87$''''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 5.00$'''''''''' 4.62$'''''''''' 4.62$''''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 5.43$'''''''''' 5.05$'''''''''' 5.05$''''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 5.44$'''''''''' 5.06$'''''''''' 5.06$''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 4.81$'''''''''' 4.43$'''''''''' 4.43$''''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 4.45$'''''''''' 4.08$'''''''''' 4.08$''''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 4.02$'''''''''' 3.64$'''''''''' 3.64$''''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 3.61$'''''''''' 3.23$'''''''''' 3.23$''''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 3.16$'''''''''' 2.78$'''''''''' 2.78$''''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 2.63$'''''''''' 2.25$'''''''''' 2.25$''''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 2.21$'''''''''' 1.83$'''''''''' 1.83$''''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 1.62$'''''''''' 1.24$'''''''''' 1.24$''''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 1.06$'''''''''' 0.68$'''''''''' 0.68$''''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.48$'''''''''' 0.10$'''''''''' 0.10$''''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' 0.09$'''''''''' (0.29)$'''''''' (0.29)$'''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.24)$''''''''' (0.62)$'''''''' (0.38)$'''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' (0.46)$''''''''' (0.83)$'''''''' (0.38)$'''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (0.66)$''''''''' (1.04)$'''''''' (0.38)$'''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (0.85)$''''''''' (1.23)$'''''''' (0.38)$'''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (1.05)$''''''''' (1.43)$'''''''' (0.38)$'''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (1.25)$''''''''' (1.63)$'''''''' (0.38)$'''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (1.40)$''''''''' (1.77)$'''''''' (0.38)$'''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.52)$''''''''' (1.90)$'''''''' (0.38)$'''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (1.63)$''''''''' (2.01)$'''''''' (0.38)$'''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (1.73)$''''''''' (2.11)$'''''''' (0.38)$'''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (1.83)$''''''''' (2.21)$'''''''' (0.38)$'''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (1.91)$''''''''' (2.29)$'''''''' (0.38)$'''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (1.99)$''''''''' (2.37)$'''''''' (0.38)$'''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (2.05)$''''''''' (2.43)$'''''''' (0.38)$'''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (2.12)$''''''''' (2.50)$'''''''' (0.38)$'''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (2.17)$''''''''' (2.55)$'''''''' (0.38)$'''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (2.22)$''''''''' (2.60)$'''''''' (0.38)$'''''

Put'Option'0'NYSETable:'09

'$(4.00)''$(3.00)''$(2.00)''$(1.00)'

'$H'''''$1.00'''$2.00'''$3.00'''$4.00'''$5.00'''$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Put'Op=on'0'NYSE'


Payoff'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.77)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'

fluctuationsPayoff Profit

Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' $0.37 (0.40)$'''''''''' (0.40)$'''''

(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' $1.37 0.60$''''''''''' 0.60$''''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' $4.38 3.61$''''''''''' 3.61$''''''

(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' $5.17 4.40$''''''''''' 4.40$''''''

(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' $5.64 4.87$''''''''''' 4.87$''''''

(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' $5.65 4.88$''''''''''' 4.88$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' $4.94 4.18$''''''''''' 4.18$''''''

321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' $4.54 3.77$''''''''''' 3.77$''''''

405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' $4.03 3.26$''''''''''' 3.26$''''''

379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' $3.55 2.78$''''''''''' 2.78$''''''

429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' $3.01 2.24$''''''''''' 2.24$''''''

523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' $2.35 1.58$''''''''''' 1.58$''''''

413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' $1.83 1.06$''''''''''' 1.06$''''''

600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' $1.07 0.30$''''''''''' 0.30$''''''

573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' $0.35 (0.42)$'''''''''' (0.42)$'''''

610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' H$0.42 (1.19)$'''''''''' (0.77)$'''''

424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' H$0.96 (1.73)$'''''''''' (0.77)$'''''

357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' H$1.41 (2.18)$'''''''''' (0.77)$'''''

238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' H$1.71 (2.48)$'''''''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' H$2.00 (2.77)$'''''''''' (0.77)$'''''

222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' H$2.28 (3.05)$'''''''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' H$2.58 (3.35)$'''''''''' (0.77)$'''''

238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' H$2.88 (3.65)$'''''''''' (0.77)$'''''

175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' H$3.10 (3.87)$'''''''''' (0.77)$'''''

154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' H$3.30 (4.06)$'''''''''' (0.77)$'''''

142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' H$3.48 (4.24)$'''''''''' (0.77)$'''''

131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' H$3.64 (4.41)$'''''''''' (0.77)$'''''

121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' H$3.80 (4.56)$'''''''''' (0.77)$'''''

112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' H$3.94 (4.71)$'''''''''' (0.77)$'''''

103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' H$4.07 (4.84)$'''''''''' (0.77)$'''''

96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' H$4.19 (4.96)$'''''''''' (0.77)$'''''

88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' H$4.30 (5.07)$'''''''''' (0.77)$'''''

81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' H$4.41 (5.17)$'''''''''' (0.77)$'''''

75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' H$4.50 (5.27)$'''''''''' (0.77)$'''''

Put'Option'0'S&P'500

Table:'10

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Put'Op;on'0'S&P'500'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.38




Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$'''''''''' 0.75$''''''''''' 0.38$''''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 1.35$'''''''''' 0.97$''''''''''' 0.38$''''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 4.25$'''''''''' 3.87$''''''''''' 0.38$''''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 5.00$'''''''''' 4.62$''''''''''' 0.38$''''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 5.43$'''''''''' 5.05$''''''''''' 0.38$''''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 5.44$'''''''''' 5.06$''''''''''' 0.38$''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 4.81$'''''''''' 4.43$''''''''''' 0.38$''''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 4.45$'''''''''' 4.08$''''''''''' 0.38$''''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 4.02$'''''''''' 3.64$''''''''''' 0.38$''''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 3.61$'''''''''' 3.23$''''''''''' 0.38$''''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 3.16$'''''''''' 2.78$''''''''''' 0.38$''''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 2.63$'''''''''' 2.25$''''''''''' 0.38$''''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 2.21$'''''''''' 1.83$''''''''''' 0.38$''''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 1.62$'''''''''' 1.24$''''''''''' 0.38$''''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 1.06$'''''''''' 0.68$''''''''''' 0.38$''''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.48$'''''''''' 0.10$''''''''''' 0.10$''''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' 0.09$'''''''''' (0.29)$''''''''' (0.29)$'''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.24)$''''''''' (0.62)$''''''''' (0.62)$'''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' (0.46)$''''''''' (0.83)$''''''''' (0.83)$'''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (0.66)$''''''''' (1.04)$''''''''' (1.04)$'''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (0.85)$''''''''' (1.23)$''''''''' (1.23)$'''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (1.05)$''''''''' (1.43)$''''''''' (1.43)$'''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (1.25)$''''''''' (1.63)$''''''''' (1.63)$'''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (1.40)$''''''''' (1.77)$''''''''' (1.77)$'''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.52)$''''''''' (1.90)$''''''''' (1.90)$'''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (1.63)$''''''''' (2.01)$''''''''' (2.01)$'''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (1.73)$''''''''' (2.11)$''''''''' (2.11)$'''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (1.83)$''''''''' (2.21)$''''''''' (2.21)$'''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (1.91)$''''''''' (2.29)$''''''''' (2.29)$'''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (1.99)$''''''''' (2.37)$''''''''' (2.37)$'''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (2.05)$''''''''' (2.43)$''''''''' (2.43)$'''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (2.12)$''''''''' (2.50)$''''''''' (2.50)$'''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (2.17)$''''''''' (2.55)$''''''''' (2.55)$'''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (2.22)$''''''''' (2.60)$''''''''' (2.60)$'''''

Sell'A'Call'.'NYSETable:'11

'$(4.00)''$(3.00)''$(2.00)''$(1.00)'

'$(4.00)''$(3.00)''$(2.00)''$(1.00)'

'$H'''''$1.00'''$2.00'''$3.00'''$4.00'''$5.00'''$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Sell'A'Call'.'NYSE'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.77



Stock'price'fluctuations Payoff Profit Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$''''''''' (0.40)$'''''''' (0.40)$''''''''(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' 1.37$''''''''' 0.60$'''''''''' 0.60$''''''''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' 4.38$''''''''' 3.61$'''''''''' 0.77$''''''''''(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' 5.17$''''''''' 4.40$'''''''''' 0.77$''''''''''(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' 5.64$''''''''' 4.87$'''''''''' 0.77$''''''''''(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' 5.65$''''''''' 4.88$'''''''''' 0.77$''''''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' 4.94$''''''''' 4.18$'''''''''' 0.77$''''''''''321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' 4.54$''''''''' 3.77$'''''''''' 0.77$''''''''''405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' 4.03$''''''''' 3.26$'''''''''' 0.77$''''''''''379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' 3.55$''''''''' 2.78$'''''''''' 0.77$''''''''''429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' 3.01$''''''''' 2.24$'''''''''' 0.77$''''''''''523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' 2.35$''''''''' 1.58$'''''''''' 0.77$''''''''''413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' 1.83$''''''''' 1.06$'''''''''' 0.77$''''''''''600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' 1.07$''''''''' 0.30$'''''''''' 0.30$''''''''''573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' 0.35$''''''''' (0.42)$'''''''' (0.42)$''''''''610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' (0.42)$'''''''' (1.19)$'''''''' (1.19)$''''''''424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' (0.96)$'''''''' (1.73)$'''''''' (1.73)$''''''''357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' (1.41)$'''''''' (2.18)$'''''''' (2.18)$''''''''238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' (1.71)$'''''''' (2.48)$'''''''' (2.48)$''''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' (2.00)$'''''''' (2.77)$'''''''' (2.77)$''''''''222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' (2.28)$'''''''' (3.05)$'''''''' (3.05)$''''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' (2.58)$'''''''' (3.35)$'''''''' (3.35)$''''''''238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' (2.88)$'''''''' (3.65)$'''''''' (3.65)$''''''''175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' (3.10)$'''''''' (3.87)$'''''''' (3.87)$''''''''154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' (3.30)$'''''''' (4.06)$'''''''' (4.06)$''''''''142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' (3.48)$'''''''' (4.24)$'''''''' (4.24)$''''''''131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' (3.64)$'''''''' (4.41)$'''''''' (4.41)$''''''''121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' (3.80)$'''''''' (4.56)$'''''''' (4.56)$''''''''112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' (3.94)$'''''''' (4.71)$'''''''' (4.71)$''''''''103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' (4.07)$'''''''' (4.84)$'''''''' (4.84)$''''''''96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' (4.19)$'''''''' (4.96)$'''''''' (4.96)$''''''''88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' (4.30)$'''''''' (5.07)$'''''''' (5.07)$''''''''81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' (4.41)$'''''''' (5.17)$'''''''' (5.17)$''''''''75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' (4.50)$'''''''' (5.27)$'''''''' (5.27)$''''''''

Sell'A'Call'.'S&P'500Table:'12

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Sell'A'Call'.'S&P'500'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.38




Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.37)$''''' 0.01$'''''' 0.01$''''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' (1.35)$''''' (1.73)$''''' (1.73)$'''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' (4.25)$''''' (4.63)$''''' (4.63)$'''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' (5.00)$''''' (5.37)$''''' (5.37)$'''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' (5.43)$''''' (5.81)$''''' (5.81)$'''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' (5.44)$''''' (5.82)$''''' (5.82)$'''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' (4.81)$''''' (5.19)$''''' (5.19)$'''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' (4.45)$''''' (4.83)$''''' (4.83)$'''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' (4.02)$''''' (4.39)$''''' (4.39)$'''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' (3.61)$''''' (3.99)$''''' (3.99)$'''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' (3.16)$''''' (3.54)$''''' (3.54)$'''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' (2.63)$''''' (3.01)$''''' (3.01)$'''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' (2.21)$''''' (2.59)$''''' (2.59)$'''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' (1.62)$''''' (2.00)$''''' (2.00)$'''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' (1.06)$''''' (1.44)$''''' (1.44)$'''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' (0.48)$''''' (0.86)$''''' (0.86)$'''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' (0.09)$''''' (0.46)$''''' (0.46)$'''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' 0.24$'''''' (0.14)$''''' (0.14)$'''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' 0.46$'''''' 0.08$'''''' 0.08$''''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' 0.66$'''''' 0.28$'''''' 0.28$''''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' 0.85$'''''' 0.48$'''''' 0.38$''''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' 1.05$'''''' 0.67$'''''' 0.38$''''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' 1.25$'''''' 0.87$'''''' 0.38$''''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' 1.40$'''''' 1.02$'''''' 0.38$''''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' 1.52$'''''' 1.14$'''''' 0.38$''''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' 1.63$'''''' 1.25$'''''' 0.38$''''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' 1.73$'''''' 1.35$'''''' 0.38$''''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' 1.83$'''''' 1.45$'''''' 0.38$''''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' 1.91$'''''' 1.53$'''''' 0.38$''''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' 1.99$'''''' 1.61$'''''' 0.38$''''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' 2.05$'''''' 1.68$'''''' 0.38$''''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' 2.12$'''''' 1.74$'''''' 0.38$''''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' 2.17$'''''' 1.79$'''''' 0.38$''''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' 2.22$'''''' 1.85$'''''' 0.38$''''''

Sell'A'Put'/'NYSETable:'13

'$(7.00)''$(6.00)''$(5.00)''$(4.00)''$(3.00)''$(2.00)''$(1.00)'

'$H'''''$1.00'''$2.00'''$3.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Sell'A'Put'/'NYSE'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.77




Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.37)$'''''' (1.14)$'''''' (1.14)$''''''(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' (1.37)$'''''' (2.13)$'''''' (2.13)$''''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' (4.38)$'''''' (5.15)$'''''' (5.15)$''''''(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' (5.17)$'''''' (5.94)$'''''' (5.94)$''''''(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' (5.64)$'''''' (6.41)$'''''' (6.41)$''''''(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' (5.65)$'''''' (6.42)$'''''' (6.42)$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' (4.94)$'''''' (5.71)$'''''' (5.71)$''''''321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' (4.54)$'''''' (5.30)$'''''' (5.30)$''''''405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' (4.03)$'''''' (4.79)$'''''' (4.79)$''''''379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' (3.55)$'''''' (4.32)$'''''' (4.32)$''''''429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' (3.01)$'''''' (3.77)$'''''' (3.77)$''''''523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' (2.35)$'''''' (3.11)$'''''' (3.11)$''''''413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' (1.83)$'''''' (2.59)$'''''' (2.59)$''''''600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' (1.07)$'''''' (1.84)$'''''' (1.84)$''''''573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' (0.35)$'''''' (1.11)$'''''' (1.11)$''''''610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' 0.42$'''''''' (0.34)$'''''' (0.34)$''''''424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' 0.96$'''''''' 0.19$''''''' 0.19$'''''''357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' 1.41$'''''''' 0.64$''''''' 0.64$'''''''238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' 1.71$'''''''' 0.94$''''''' 0.77$'''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' 2.00$'''''''' 1.24$''''''' 0.77$'''''''222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' 2.28$'''''''' 1.52$''''''' 0.77$'''''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' 2.58$'''''''' 1.81$''''''' 0.77$'''''''238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' 2.88$'''''''' 2.11$''''''' 0.77$'''''''175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' 3.10$'''''''' 2.33$''''''' 0.77$'''''''154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' 3.30$'''''''' 2.53$''''''' 0.77$'''''''142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' 3.48$'''''''' 2.71$''''''' 0.77$'''''''131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' 3.64$'''''''' 2.88$''''''' 0.77$'''''''121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' 3.80$'''''''' 3.03$''''''' 0.77$'''''''112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' 3.94$'''''''' 3.17$''''''' 0.77$'''''''103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' 4.07$'''''''' 3.30$''''''' 0.77$'''''''96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' 4.19$'''''''' 3.42$''''''' 0.77$'''''''88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' 4.30$'''''''' 3.53$''''''' 0.77$'''''''81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' 4.41$'''''''' 3.64$''''''' 0.77$'''''''75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' 4.50$'''''''' 3.73$''''''' 0.77$'''''''

Sell'A'Put'/'S&P'500Table:'14

'$(8.00)'

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Sell'A'Put'/'S&P'500'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.38



Stock'price'fluctuations Payoff Profit Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$''''''''' 0.38$''''''''' 0.38$'''''''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 1.35$''''''''' 0.75$''''''''' 0.38$'''''''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 4.25$''''''''' 1.73$''''''''' 0.38$'''''''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 5.00$''''''''' 4.63$''''''''' 0.38$'''''''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 5.43$''''''''' 5.37$''''''''' 0.38$'''''''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 5.44$''''''''' 5.81$''''''''' 0.38$'''''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 4.81$''''''''' 5.82$''''''''' 0.38$'''''''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 4.45$''''''''' 5.19$''''''''' 0.38$'''''''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 4.02$''''''''' 4.83$''''''''' 0.38$'''''''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 3.61$''''''''' 4.39$''''''''' 0.38$'''''''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 3.16$''''''''' 3.99$''''''''' 0.38$'''''''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 2.63$''''''''' 3.54$''''''''' 0.38$'''''''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 2.21$''''''''' 3.01$''''''''' 0.38$'''''''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 1.62$''''''''' 2.59$''''''''' 0.38$'''''''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 1.06$''''''''' 2.00$''''''''' 0.38$'''''''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.48$''''''''' 1.44$''''''''' 0.38$'''''''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' 0.09$''''''''' 0.86$''''''''' 0.38$'''''''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.24)$'''''''' 0.46$''''''''' 0.38$'''''''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' (0.46)$'''''''' 0.14$''''''''' 0.14$'''''''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (0.66)$'''''''' (0.08)$'''''''' (0.08)$''''''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (0.85)$'''''''' (0.28)$'''''''' (0.28)$''''''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (1.05)$'''''''' (0.48)$'''''''' (0.48)$''''''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (1.25)$'''''''' (0.67)$'''''''' (0.67)$''''''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (1.40)$'''''''' (0.87)$'''''''' (0.87)$''''''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.52)$'''''''' (1.02)$'''''''' (1.02)$''''''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (1.63)$'''''''' (1.14)$'''''''' (1.14)$''''''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (1.73)$'''''''' (1.25)$'''''''' (1.25)$''''''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (1.83)$'''''''' (1.35)$'''''''' (1.35)$''''''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (1.91)$'''''''' (1.45)$'''''''' (1.45)$''''''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (1.99)$'''''''' (1.53)$'''''''' (1.53)$''''''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (2.05)$'''''''' (1.61)$'''''''' (1.61)$''''''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (2.12)$'''''''' (1.68)$'''''''' (1.68)$''''''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (2.17)$'''''''' (1.74)$'''''''' (1.74)$''''''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (2.22)$'''''''' (1.79)$'''''''' (1.79)$''''''''

Covered'Call'0'NYSETable:'15

'$(4.00)''$(3.00)''$(2.00)''$(1.00)'

'$H'''''$1.00'''$2.00'''$3.00'''$4.00'''$5.00'''$6.00'''$7.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Covered'Call'0'NYSE'


Payoff'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.77)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'


Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' $0.37 (0.77)$''''' (0.77)$'''''

(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' $1.37 (0.40)$''''' (0.40)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' $4.38 0.60$'''''' 0.60$''''''

(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' $5.17 3.61$'''''' 3.61$''''''

(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' $5.64 4.40$'''''' 4.40$''''''

(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' $5.65 4.87$'''''' 4.87$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' $4.94 4.88$'''''' 4.88$''''''

321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' $4.54 4.18$'''''' 4.18$''''''

405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' $4.03 3.77$'''''' 3.77$''''''

379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' $3.55 3.26$'''''' 3.26$''''''

429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' $3.01 2.78$'''''' 2.78$''''''

523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' $2.35 2.24$'''''' 2.24$''''''

413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' $1.83 1.58$'''''' 1.58$''''''

600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' $1.07 1.06$'''''' 1.06$''''''

573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' $0.35 0.30$'''''' 0.30$''''''

610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' H$0.42 (0.42)$''''' (0.42)$'''''

424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' H$0.96 (1.19)$''''' (0.77)$'''''

357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' H$1.41 (1.73)$''''' (0.77)$'''''

238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' H$1.71 (2.18)$''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' H$2.00 (2.48)$''''' (0.77)$'''''

222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' H$2.28 (2.77)$''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' H$2.58 (3.05)$''''' (0.77)$'''''

238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' H$2.88 (3.35)$''''' (0.77)$'''''

175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' H$3.10 (3.65)$''''' (0.77)$'''''

154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' H$3.30 (3.87)$''''' (0.77)$'''''

142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' H$3.48 (4.06)$''''' (0.77)$'''''

131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' H$3.64 (4.24)$''''' (0.77)$'''''

121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' H$3.80 (4.41)$''''' (0.77)$'''''

112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' H$3.94 (4.56)$''''' (0.77)$'''''

103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' H$4.07 (4.71)$''''' (0.77)$'''''

96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' H$4.19 (4.84)$''''' (0.77)$'''''

88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' H$4.30 (4.96)$''''' (0.77)$'''''

81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' H$4.41 (5.07)$''''' (0.77)$'''''

75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' H$4.50 (5.17)$''''' (0.77)$'''''

Protected'Put'0'S&P'500

Table:'18

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Protected'Put'0'S&P'500'


Payoff'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)$0.77

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'


Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$''''''''' (0.77)$''''' (0.77)$'''''''

(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' 1.37$''''''''' (0.40)$''''' (0.40)$'''''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' 4.38$''''''''' 0.60$''''''' 0.60$''''''''

(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' 5.17$''''''''' 3.61$''''''' 0.77$''''''''

(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' 5.64$''''''''' 4.40$''''''' 0.77$''''''''

(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' 5.65$''''''''' 4.87$''''''' 0.77$''''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' 4.94$''''''''' 4.88$''''''' 0.77$''''''''

321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' 4.54$''''''''' 4.18$''''''' 0.77$''''''''

405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' 4.03$''''''''' 3.77$''''''' 0.77$''''''''

379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' 3.55$''''''''' 3.26$''''''' 0.77$''''''''

429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' 3.01$''''''''' 2.78$''''''' 0.77$''''''''

523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' 2.35$''''''''' 2.24$''''''' 0.77$''''''''

413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' 1.83$''''''''' 1.58$''''''' 0.77$''''''''

600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' 1.07$''''''''' 1.06$''''''' 0.77$''''''''

573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' 0.35$''''''''' 0.30$''''''' 0.30$''''''''

610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' (0.42)$''''''' (0.42)$''''' (0.42)$'''''''

424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' (0.96)$''''''' (1.19)$''''' (1.19)$'''''''

357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' (1.41)$''''''' (1.73)$''''' (1.73)$'''''''

238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' (1.71)$''''''' (2.18)$''''' (2.18)$'''''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' (2.00)$''''''' (2.48)$''''' (2.48)$'''''''

222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' (2.28)$''''''' (2.77)$''''' (2.77)$'''''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' (2.58)$''''''' (3.05)$''''' (3.05)$'''''''

238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' (2.88)$''''''' (3.35)$''''' (3.35)$'''''''

175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' (3.10)$''''''' (3.65)$''''' (3.65)$'''''''

154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' (3.30)$''''''' (3.87)$''''' (3.87)$'''''''

142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' (3.48)$''''''' (4.06)$''''' (4.06)$'''''''

131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' (3.64)$''''''' (4.24)$''''' (4.24)$'''''''

121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' (3.80)$''''''' (4.41)$''''' (4.41)$'''''''

112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' (3.94)$''''''' (4.56)$''''' (4.56)$'''''''

103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' (4.07)$''''''' (4.71)$''''' (4.71)$'''''''

96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' (4.19)$''''''' (4.84)$''''' (4.84)$'''''''

88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' (4.30)$''''''' (4.96)$''''' (4.96)$'''''''

81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' (4.41)$''''''' (5.07)$''''' (5.07)$'''''''

75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' (4.50)$''''''' (5.17)$''''' (5.17)$'''''''

Covered'Call'0'S&P'500

Table:'16

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Covered'Call'0'S&P'500'


Payoff'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.38)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'


Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.37$'''''' (0.38)$''''' (0.38)$'''''

(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 1.35$'''''' (0.01)$''''' (0.01)$'''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 4.25$'''''' 0.97$'''''' 0.97$''''''

(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 5.00$'''''' 3.87$'''''' 3.87$''''''

(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 5.43$'''''' 4.62$'''''' 4.62$''''''

(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 5.44$'''''' 5.05$'''''' 5.05$''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 4.81$'''''' 5.06$'''''' 5.06$''''''

281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 4.45$'''''' 4.43$'''''' 4.43$''''''

348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 4.02$'''''' 4.08$'''''' 4.08$''''''

320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 3.61$'''''' 3.64$'''''' 3.64$''''''

356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 3.16$'''''' 3.23$'''''' 3.23$''''''

425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 2.63$'''''' 2.78$'''''' 2.78$''''''

330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 2.21$'''''' 2.25$'''''' 2.25$''''''

469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 1.62$'''''' 1.83$'''''' 1.83$''''''

440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 1.06$'''''' 1.24$'''''' 1.24$''''''

460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.48$'''''' 0.68$'''''' 0.68$''''''

314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' 0.09$'''''' 0.10$'''''' 0.10$''''''

259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.24)$''''' (0.29)$''''' (0.29)$'''''

169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' (0.46)$''''' (0.62)$''''' (0.38)$'''''

163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (0.66)$''''' (0.83)$''''' (0.38)$'''''

152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (0.85)$''''' (1.04)$''''' (0.38)$'''''

157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (1.05)$''''' (1.23)$''''' (0.38)$'''''

157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (1.25)$''''' (1.43)$''''' (0.38)$'''''

113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (1.40)$''''' (1.63)$''''' (0.38)$'''''

98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.52)$''''' (1.77)$''''' (0.38)$'''''

89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (1.63)$''''' (1.90)$''''' (0.38)$'''''

80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (1.73)$''''' (2.01)$''''' (0.38)$'''''

73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (1.83)$''''' (2.11)$''''' (0.38)$'''''

66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (1.91)$''''' (2.21)$''''' (0.38)$'''''

60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (1.99)$''''' (2.29)$''''' (0.38)$'''''

54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (2.05)$''''' (2.37)$''''' (0.38)$'''''

49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (2.12)$''''' (2.43)$''''' (0.38)$'''''

44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (2.17)$''''' (2.50)$''''' (0.38)$'''''

40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (2.22)$''''' (2.55)$''''' (0.38)$'''''

Protected'Put'0'NYSE

Table:'17

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$H''''

'$1.00''

'$2.00''

'$3.00''

'$4.00''

'$5.00''

'$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Protected'Put'0'NYSE'


Payoff'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.77)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'


Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' $0.37 (0.77)$''''' (0.77)$'''''

(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' $1.37 (0.40)$''''' (0.40)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' $4.38 0.60$'''''' 0.60$''''''

(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' $5.17 3.61$'''''' 3.61$''''''

(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' $5.64 4.40$'''''' 4.40$''''''

(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' $5.65 4.87$'''''' 4.87$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' $4.94 4.88$'''''' 4.88$''''''

321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' $4.54 4.18$'''''' 4.18$''''''

405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' $4.03 3.77$'''''' 3.77$''''''

379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' $3.55 3.26$'''''' 3.26$''''''

429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' $3.01 2.78$'''''' 2.78$''''''

523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' $2.35 2.24$'''''' 2.24$''''''

413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' $1.83 1.58$'''''' 1.58$''''''

600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' $1.07 1.06$'''''' 1.06$''''''

573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' $0.35 0.30$'''''' 0.30$''''''

610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' H$0.42 (0.42)$''''' (0.42)$'''''

424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' H$0.96 (1.19)$''''' (0.77)$'''''

357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' H$1.41 (1.73)$''''' (0.77)$'''''

238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' H$1.71 (2.18)$''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' H$2.00 (2.48)$''''' (0.77)$'''''

222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' H$2.28 (2.77)$''''' (0.77)$'''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' H$2.58 (3.05)$''''' (0.77)$'''''

238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' H$2.88 (3.35)$''''' (0.77)$'''''

175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' H$3.10 (3.65)$''''' (0.77)$'''''

154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' H$3.30 (3.87)$''''' (0.77)$'''''

142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' H$3.48 (4.06)$''''' (0.77)$'''''

131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' H$3.64 (4.24)$''''' (0.77)$'''''

121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' H$3.80 (4.41)$''''' (0.77)$'''''

112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' H$3.94 (4.56)$''''' (0.77)$'''''

103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' H$4.07 (4.71)$''''' (0.77)$'''''

96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' H$4.19 (4.84)$''''' (0.77)$'''''

88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' H$4.30 (4.96)$''''' (0.77)$'''''

81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' H$4.41 (5.07)$''''' (0.77)$'''''

75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' H$4.50 (5.17)$''''' (0.77)$'''''

Protected'Put'0'S&P'500

Table:'18

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$H''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Protected'Put'0'S&P'500'


Payoff'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


($0.38)$0.38



Stock'price'fluctuations

Covered'Call

Protected'Put

Profit Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.38$'''''' (0.38)$''''''' (0.00)$''''' (0.00)$'''''''''''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 0.38$'''''' (0.01)$''''''' 0.37$'''''' 0.37$''''''''''''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 0.38$'''''' 0.97$'''''''' 1.35$'''''' 0.38$''''''''''''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 0.38$'''''' 3.87$'''''''' 4.25$'''''' 0.38$''''''''''''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 0.38$'''''' 4.62$'''''''' 5.00$'''''' 0.38$''''''''''''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 0.38$'''''' 5.05$'''''''' 5.43$'''''' 0.38$''''''''''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 0.38$'''''' 5.06$'''''''' 5.44$'''''' 0.38$''''''''''''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 0.38$'''''' 4.43$'''''''' 4.81$'''''' 0.38$''''''''''''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 0.38$'''''' 4.08$'''''''' 4.45$'''''' 0.38$''''''''''''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 0.38$'''''' 3.64$'''''''' 4.02$'''''' 0.38$''''''''''''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 0.38$'''''' 3.23$'''''''' 3.61$'''''' 0.38$''''''''''''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 0.38$'''''' 2.78$'''''''' 3.16$'''''' 0.38$''''''''''''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 0.38$'''''' 2.25$'''''''' 2.63$'''''' 0.38$''''''''''''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 0.38$'''''' 1.83$'''''''' 2.21$'''''' 0.38$''''''''''''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 0.38$'''''' 1.24$'''''''' 1.62$'''''' 0.38$''''''''''''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.38$'''''' 0.68$'''''''' 1.06$'''''' 0.38$''''''''''''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' 0.38$'''''' 0.10$'''''''' 0.48$'''''' 0.38$''''''''''''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' 0.38$'''''' (0.29)$''''''' 0.09$'''''' 0.09$''''''''''''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' 0.14$'''''' (0.38)$''''''' (0.24)$''''' (0.24)$'''''''''''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (0.08)$''''' (0.38)$''''''' (0.46)$''''' (0.38)$'''''''''''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (0.28)$''''' (0.38)$''''''' (0.66)$''''' (0.38)$'''''''''''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (0.48)$''''' (0.38)$''''''' (0.85)$''''' (0.38)$'''''''''''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (0.67)$''''' (0.38)$''''''' (1.05)$''''' (0.38)$'''''''''''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (0.87)$''''' (0.38)$''''''' (1.25)$''''' (0.38)$'''''''''''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.02)$''''' (0.38)$''''''' (1.40)$''''' (0.38)$'''''''''''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (1.14)$''''' (0.38)$''''''' (1.52)$''''' (0.38)$'''''''''''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (1.25)$''''' (0.38)$''''''' (1.63)$''''' (0.38)$'''''''''''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (1.35)$''''' (0.38)$''''''' (1.73)$''''' (0.38)$'''''''''''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (1.45)$''''' (0.38)$''''''' (1.83)$''''' (0.38)$'''''''''''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (1.53)$''''' (0.38)$''''''' (1.91)$''''' (0.38)$'''''''''''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (1.61)$''''' (0.38)$''''''' (1.99)$''''' (0.38)$'''''''''''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (1.68)$''''' (0.38)$''''''' (2.05)$''''' (0.38)$'''''''''''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (1.74)$''''' (0.38)$''''''' (2.12)$''''' (0.38)$'''''''''''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (1.79)$''''' (0.38)$''''''' (2.17)$''''' (0.38)$'''''''''''''

Protective'Collar'3'NYSE

Table:'19

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$I''''

'$1.00''

'$2.00''

'$3.00''

'$4.00''

'$5.00''

'$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Protec<ve'Collar'3'NYSE'


Covered'Call'

Protected'Put'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


($0.77)$0.77



Stock'price'fluctuations

Covered'Call

Protected'Put

ProfitActual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.77)$''''' (0.77)$'''''' (1.53)$''''' (0.77)$'''''(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' (0.40)$''''' (0.40)$'''''' (0.80)$''''' (0.77)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' 0.60$'''''' 0.60$'''''''' 1.20$'''''' 0.77$''''''(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' 0.77$'''''' 3.61$'''''''' 4.38$'''''' 0.77$''''''(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' 0.77$'''''' 4.40$'''''''' 5.17$'''''' 0.77$''''''(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' 0.77$'''''' 4.87$'''''''' 5.64$'''''' 0.77$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' 0.77$'''''' 4.88$'''''''' 5.65$'''''' 0.77$''''''321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' 0.77$'''''' 4.18$'''''''' 4.94$'''''' 0.77$''''''405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' 0.77$'''''' 3.77$'''''''' 4.54$'''''' 0.77$''''''379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' 0.77$'''''' 3.26$'''''''' 4.03$'''''' 0.77$''''''429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' 0.77$'''''' 2.78$'''''''' 3.55$'''''' 0.77$''''''523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' 0.77$'''''' 2.24$'''''''' 3.01$'''''' 0.77$''''''413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' 0.77$'''''' 1.58$'''''''' 2.35$'''''' 0.77$''''''600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' 0.77$'''''' 1.06$'''''''' 1.83$'''''' 0.77$''''''573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' 0.30$'''''' 0.30$'''''''' 0.60$'''''' 0.60$''''''610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' (0.42)$''''' (0.42)$'''''' (0.84)$''''' (0.77)$'''''424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' (1.19)$''''' (0.77)$'''''' (1.96)$''''' (0.77)$'''''357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' (1.73)$''''' (0.77)$'''''' (2.49)$''''' (0.77)$'''''238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' (2.18)$''''' (0.77)$'''''' (2.94)$''''' (0.77)$'''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' (2.48)$''''' (0.77)$'''''' (3.24)$''''' (0.77)$'''''222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' (2.77)$''''' (0.77)$'''''' (3.54)$''''' (0.77)$'''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' (3.05)$''''' (0.77)$'''''' (3.82)$''''' (0.77)$'''''238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' (3.35)$''''' (0.77)$'''''' (4.11)$''''' (0.77)$'''''175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' (3.65)$''''' (0.77)$'''''' (4.41)$''''' (0.77)$'''''154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' (3.87)$''''' (0.77)$'''''' (4.64)$''''' (0.77)$'''''142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' (4.06)$''''' (0.77)$'''''' (4.83)$''''' (0.77)$'''''131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' (4.24)$''''' (0.77)$'''''' (5.01)$''''' (0.77)$'''''121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' (4.41)$''''' (0.77)$'''''' (5.18)$''''' (0.77)$'''''112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' (4.56)$''''' (0.77)$'''''' (5.33)$''''' (0.77)$'''''103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' (4.71)$''''' (0.77)$'''''' (5.47)$''''' (0.77)$'''''96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' (4.84)$''''' (0.77)$'''''' (5.60)$''''' (0.77)$'''''88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' (4.96)$''''' (0.77)$'''''' (5.72)$''''' (0.77)$'''''81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' (5.07)$''''' (0.77)$'''''' (5.84)$''''' (0.77)$'''''75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' (5.17)$''''' (0.77)$'''''' (5.94)$''''' (0.77)$'''''

Protective'Collar'3'S&P'500

Table:'20

'$(8.00)'

'$(6.00)'

'$(4.00)'

'$(2.00)'

'$I''''

'$2.00''

'$4.00''

'$6.00''

'$8.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Protec<ve'Collar'3'S&P'500'Change'in'Share'Price'

Covered'Call'

Protected'Put'

Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.38)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'

fluctuationsCall'Option Put'Option Profit

Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.38)$''''' (0.01)$''''' (0.39)$''''' (0.38)$'''''

(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' (0.38)$''''' 0.97$'''''' 0.59$'''''' 0.59$''''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' (0.38)$''''' 3.87$'''''' 3.49$'''''' 3.49$''''''

(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' (0.38)$''''' 4.62$'''''' 4.24$'''''' 4.24$''''''

(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' (0.38)$''''' 5.05$'''''' 4.67$'''''' 4.67$''''''

(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' (0.38)$''''' 5.06$'''''' 4.68$'''''' 4.68$''''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' (0.38)$''''' 4.43$'''''' 4.05$'''''' 4.05$''''''

281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' (0.38)$''''' 4.08$'''''' 3.70$'''''' 3.70$''''''

348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' (0.38)$''''' 3.64$'''''' 3.26$'''''' 3.26$''''''

320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' (0.38)$''''' 3.23$'''''' 2.85$'''''' 2.85$''''''

356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' (0.38)$''''' 2.78$'''''' 2.40$'''''' 2.40$''''''

425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' (0.38)$''''' 2.25$'''''' 1.87$'''''' 1.87$''''''

330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' (0.38)$''''' 1.83$'''''' 1.45$'''''' 1.45$''''''

469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' (0.38)$''''' 1.24$'''''' 0.86$'''''' 0.86$''''''

440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' (0.38)$''''' 0.68$'''''' 0.30$'''''' 0.30$''''''

460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' (0.38)$''''' 0.10$'''''' (0.28)$''''' (0.28)$'''''

314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' (0.38)$''''' (0.29)$''''' (0.67)$''''' (0.38)$'''''

259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.14)$''''' (0.38)$''''' (0.52)$''''' (0.38)$'''''

169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' 0.08$'''''' (0.38)$''''' (0.30)$''''' (0.30)$'''''

163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' 0.28$'''''' (0.38)$''''' (0.10)$''''' (0.10)$'''''

152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' 0.48$'''''' (0.38)$''''' 0.10$'''''' 0.10$''''''

157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' 0.67$'''''' (0.38)$''''' 0.29$'''''' 0.29$''''''

157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' 0.87$'''''' (0.38)$''''' 0.49$'''''' 0.49$''''''

113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' 1.02$'''''' (0.38)$''''' 0.64$'''''' 0.64$''''''

98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' 1.14$'''''' (0.38)$''''' 0.76$'''''' 0.76$''''''

89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' 1.25$'''''' (0.38)$''''' 0.87$'''''' 0.87$''''''

80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' 1.35$'''''' (0.38)$''''' 0.98$'''''' 0.98$''''''

73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' 1.45$'''''' (0.38)$''''' 1.07$'''''' 1.07$''''''

66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' 1.53$'''''' (0.38)$''''' 1.15$'''''' 1.15$''''''

60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' 1.61$'''''' (0.38)$''''' 1.23$'''''' 1.23$''''''

54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' 1.68$'''''' (0.38)$''''' 1.30$'''''' 1.30$''''''

49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' 1.74$'''''' (0.38)$''''' 1.36$'''''' 1.36$''''''

44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' 1.79$'''''' (0.38)$''''' 1.42$'''''' 1.42$''''''

40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' 1.85$'''''' (0.38)$''''' 1.47$'''''' 1.47$''''''

Long'Straddle'3'NYSE

Table:'21

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$H''''

'$1.00''

'$2.00''

'$3.00''

'$4.00''

'$5.00''

'$6.00''

1' 4' 7' 10'13'16'19'22'25'28'31'34'

Long'Straddle'3'NYSE'

Change'in'Share'

Price'

Call'OpIon'

Put'OpIon'

Profit'

Actual'Profit'

Strike'Price'per'

share36.41$''''''''''''''

Premium'per'

share5.00$'''''''''''''''''

Premium'per'

share'(Com.)($0.77)

Change'in'

Present'Value

Change'in'Share'

Price

Stock'price'

fluctuationsCall'Option Put'Option Profit

Actual'

Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.77)$''''' (0.40)$''''' (1.17)$''''' (0.77)$'''''

(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' (0.77)$''''' 0.60$'''''' (0.17)$''''' (0.17)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' (0.77)$''''' 3.61$'''''' 2.84$'''''' 2.84$''''''

(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' (0.77)$''''' 4.40$'''''' 3.63$'''''' 3.63$''''''

(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' (0.77)$''''' 4.87$'''''' 4.11$'''''' 4.11$''''''

(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' (0.77)$''''' 4.88$'''''' 4.12$'''''' 4.12$''''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' (0.77)$''''' 4.18$'''''' 3.41$'''''' 3.41$''''''

321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' (0.77)$''''' 3.77$'''''' 3.00$'''''' 3.00$''''''

405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' (0.77)$''''' 3.26$'''''' 2.49$'''''' 2.49$''''''

379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' (0.77)$''''' 2.78$'''''' 2.01$'''''' 2.01$''''''

429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' (0.77)$''''' 2.24$'''''' 1.47$'''''' 1.47$''''''

523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' (0.77)$''''' 1.58$'''''' 0.81$'''''' 0.81$''''''

413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' (0.77)$''''' 1.06$'''''' 0.29$'''''' 0.29$''''''

600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' (0.77)$''''' 0.30$'''''' (0.47)$''''' (0.47)$'''''

573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' (0.77)$''''' (0.42)$''''' (1.19)$''''' (0.77)$'''''

610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' (0.34)$''''' (0.77)$''''' (1.11)$''''' (0.77)$'''''

424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' 0.19$'''''' (0.77)$''''' (0.57)$''''' (0.57)$'''''

357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' 0.64$'''''' (0.77)$''''' (0.12)$''''' (0.12)$'''''

238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' 0.94$'''''' (0.77)$''''' 0.18$'''''' 0.18$''''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' 1.24$'''''' (0.77)$''''' 0.47$'''''' 0.47$''''''

222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' 1.52$'''''' (0.77)$''''' 0.75$'''''' 0.75$''''''

234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' 1.81$'''''' (0.77)$''''' 1.05$'''''' 1.05$''''''

238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' 2.11$'''''' (0.77)$''''' 1.35$'''''' 1.35$''''''

175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' 2.33$'''''' (0.77)$''''' 1.57$'''''' 1.57$''''''

154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' 2.53$'''''' (0.77)$''''' 1.76$'''''' 1.76$''''''

142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' 2.71$'''''' (0.77)$''''' 1.94$'''''' 1.94$''''''

131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' 2.88$'''''' (0.77)$''''' 2.11$'''''' 2.11$''''''

121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' 3.03$'''''' (0.77)$''''' 2.26$'''''' 2.26$''''''

112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' 3.17$'''''' (0.77)$''''' 2.40$'''''' 2.40$''''''

103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' 3.30$'''''' (0.77)$''''' 2.54$'''''' 2.54$''''''

96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' 3.42$'''''' (0.77)$''''' 2.66$'''''' 2.66$''''''

88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' 3.53$'''''' (0.77)$''''' 2.77$'''''' 2.77$''''''

81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' 3.64$'''''' (0.77)$''''' 2.87$'''''' 2.87$''''''

75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' 3.73$'''''' (0.77)$''''' 2.97$'''''' 2.97$''''''

Long'Straddle'3'S&P'500

Table:'22

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$H''''

'$1.00''

'$2.00''

'$3.00''

'$4.00''

'$5.00''

'$6.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Long'Straddle'3'S&P'500'


Call'OpIon'

Put'OpIon'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.38



Stock'price'fluctuations Sell'A'Call Sell'A'Put Profit

Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' 0.38$'''''' 0.01$'''''' 0.39$'''''' 0.38$''''''(777.35)$''''''''''' (0.98)$''''''''''''''' 35.06$'''''''''''''' 0.38$'''''' (1.73)$''''' (1.35)$''''' (1.35)$'''''

(2,301.66)$'''''''' (2.90)$''''''''''''''' 32.16$'''''''''''''' 0.38$'''''' (4.63)$''''' (4.25)$''''' (4.25)$'''''(592.43)$''''''''''' (0.75)$''''''''''''''' 31.41$'''''''''''''' 0.38$'''''' (5.37)$''''' (5.00)$''''' (5.00)$'''''(346.84)$''''''''''' (0.44)$''''''''''''''' 30.98$'''''''''''''' 0.38$'''''' (5.81)$''''' (5.43)$''''' (5.43)$'''''(7.70)$''''''''''''''' (0.01)$''''''''''''''' 30.97$'''''''''''''' 0.38$'''''' (5.82)$''''' (5.44)$''''' (5.44)$'''''

501.40$'''''''''''' 0.63$''''''''''''''''' 31.60$'''''''''''''' 0.38$'''''' (5.19)$''''' (4.81)$''''' (4.81)$'''''281.72$'''''''''''' 0.36$''''''''''''''''' 31.96$'''''''''''''' 0.38$'''''' (4.83)$''''' (4.45)$''''' (4.45)$'''''348.88$'''''''''''' 0.44$''''''''''''''''' 32.39$'''''''''''''' 0.38$'''''' (4.39)$''''' (4.02)$''''' (4.02)$'''''320.61$'''''''''''' 0.40$''''''''''''''''' 32.80$'''''''''''''' 0.38$'''''' (3.99)$''''' (3.61)$''''' (3.61)$'''''356.17$'''''''''''' 0.45$''''''''''''''''' 33.25$'''''''''''''' 0.38$'''''' (3.54)$''''' (3.16)$''''' (3.16)$'''''425.61$'''''''''''' 0.54$''''''''''''''''' 33.78$'''''''''''''' 0.38$'''''' (3.01)$''''' (2.63)$''''' (2.63)$'''''330.32$'''''''''''' 0.42$''''''''''''''''' 34.20$'''''''''''''' 0.38$'''''' (2.59)$''''' (2.21)$''''' (2.21)$'''''469.98$'''''''''''' 0.59$''''''''''''''''' 34.79$'''''''''''''' 0.38$'''''' (2.00)$''''' (1.62)$''''' (1.62)$'''''440.65$'''''''''''' 0.56$''''''''''''''''' 35.35$'''''''''''''' 0.38$'''''' (1.44)$''''' (1.06)$''''' (1.06)$'''''460.75$'''''''''''' 0.58$''''''''''''''''' 35.93$'''''''''''''' 0.10$'''''' (0.86)$''''' (0.76)$''''' (0.76)$'''''314.45$'''''''''''' 0.40$''''''''''''''''' 36.32$'''''''''''''' (0.29)$''''' (0.46)$''''' (0.76)$''''' (0.76)$'''''259.48$'''''''''''' 0.33$''''''''''''''''' 36.65$'''''''''''''' (0.62)$''''' (0.14)$''''' (0.76)$''''' (0.76)$'''''169.91$'''''''''''' 0.21$''''''''''''''''' 36.87$'''''''''''''' (0.83)$''''' 0.08$'''''' (0.76)$''''' (0.76)$'''''163.69$'''''''''''' 0.21$''''''''''''''''' 37.07$'''''''''''''' (1.04)$''''' 0.28$'''''' (0.76)$''''' (0.76)$'''''152.66$'''''''''''' 0.19$''''''''''''''''' 37.26$'''''''''''''' (1.23)$''''' 0.38$'''''' (0.85)$''''' (0.85)$'''''157.65$'''''''''''' 0.20$''''''''''''''''' 37.46$'''''''''''''' (1.43)$''''' 0.38$'''''' (1.05)$''''' (1.05)$'''''157.86$'''''''''''' 0.20$''''''''''''''''' 37.66$'''''''''''''' (1.63)$''''' 0.38$'''''' (1.25)$''''' (1.25)$'''''113.84$'''''''''''' 0.14$''''''''''''''''' 37.81$'''''''''''''' (1.77)$''''' 0.38$'''''' (1.40)$''''' (1.40)$'''''98.51$'''''''''''''' 0.12$''''''''''''''''' 37.93$'''''''''''''' (1.90)$''''' 0.38$'''''' (1.52)$''''' (1.52)$'''''89.22$'''''''''''''' 0.11$''''''''''''''''' 38.04$'''''''''''''' (2.01)$''''' 0.38$'''''' (1.63)$''''' (1.63)$'''''80.88$'''''''''''''' 0.10$''''''''''''''''' 38.14$'''''''''''''' (2.11)$''''' 0.38$'''''' (1.73)$''''' (1.73)$'''''73.32$'''''''''''''' 0.09$''''''''''''''''' 38.24$'''''''''''''' (2.21)$''''' 0.38$'''''' (1.83)$''''' (1.83)$'''''66.47$'''''''''''''' 0.08$''''''''''''''''' 38.32$'''''''''''''' (2.29)$''''' 0.38$'''''' (1.91)$''''' (1.91)$'''''60.25$'''''''''''''' 0.08$''''''''''''''''' 38.40$'''''''''''''' (2.37)$''''' 0.38$'''''' (1.99)$''''' (1.99)$'''''54.61$'''''''''''''' 0.07$''''''''''''''''' 38.46$'''''''''''''' (2.43)$''''' 0.38$'''''' (2.05)$''''' (2.05)$'''''49.50$'''''''''''''' 0.06$''''''''''''''''' 38.53$'''''''''''''' (2.50)$''''' 0.38$'''''' (2.12)$''''' (2.12)$'''''44.87$'''''''''''''' 0.06$''''''''''''''''' 38.58$'''''''''''''' (2.55)$''''' 0.38$'''''' (2.17)$''''' (2.17)$'''''40.66$'''''''''''''' 0.05$''''''''''''''''' 38.63$'''''''''''''' (2.60)$''''' 0.38$'''''' (2.22)$''''' (2.22)$'''''

Short'straddle'2'NYSE

Table:'23

'$(7.00)'

'$(6.00)'

'$(5.00)'

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$G''''

'$1.00''

1' 3' 5' 7' 9'11'13'15'17'19'21'23'25'27'29'31'33'

Short'Straddle'2'NYSE'


Sell'A'Call'

Sell'A'Put'

Profit'

Actual'Profit'


36.41$''''''''''''''

Premium'per'share

5.00$'''''''''''''''''


$0.77



Stock'price'fluctuations Sell'A'Call Sell'A'Put Profit

Actual'Profit

(292.38)$''''''''''' (0.37)$''''''''''''''' 36.04$'''''''''''''' (0.40)$''''' (1.14)$''''' (1.53)$''''' (1.53)$'''''(792.11)$''''''''''' (1.00)$''''''''''''''' 35.04$'''''''''''''' 0.60$'''''' (2.13)$''''' (1.53)$''''' (1.53)$'''''

(2,389.89)$'''''''' (3.01)$''''''''''''''' 32.03$'''''''''''''' 0.77$'''''' (5.15)$''''' (4.38)$''''' (4.38)$'''''(626.82)$''''''''''' (0.79)$''''''''''''''' 31.24$'''''''''''''' 0.77$'''''' (5.94)$''''' (5.17)$''''' (5.17)$'''''(373.94)$''''''''''' (0.47)$''''''''''''''' 30.77$'''''''''''''' 0.77$'''''' (6.41)$''''' (5.64)$''''' (5.64)$'''''(8.46)$''''''''''''''' (0.01)$''''''''''''''' 30.76$'''''''''''''' 0.77$'''''' (6.42)$''''' (5.65)$''''' (5.65)$'''''

561.31$'''''''''''' 0.71$''''''''''''''''' 31.47$'''''''''''''' 0.77$'''''' (5.71)$''''' (4.94)$''''' (4.94)$'''''321.37$'''''''''''' 0.40$''''''''''''''''' 31.87$'''''''''''''' 0.77$'''''' (5.30)$''''' (4.54)$''''' (4.54)$'''''405.53$'''''''''''' 0.51$''''''''''''''''' 32.38$'''''''''''''' 0.77$'''''' (4.79)$''''' (4.03)$''''' (4.03)$'''''379.75$'''''''''''' 0.48$''''''''''''''''' 32.86$'''''''''''''' 0.77$'''''' (4.32)$''''' (3.55)$''''' (3.55)$'''''429.87$'''''''''''' 0.54$''''''''''''''''' 33.40$'''''''''''''' 0.77$'''''' (3.77)$''''' (3.01)$''''' (3.01)$'''''523.44$'''''''''''' 0.66$''''''''''''''''' 34.06$'''''''''''''' 0.77$'''''' (3.11)$''''' (2.35)$''''' (2.35)$'''''413.96$'''''''''''' 0.52$''''''''''''''''' 34.58$'''''''''''''' 0.77$'''''' (2.59)$''''' (1.83)$''''' (1.83)$'''''600.17$'''''''''''' 0.76$''''''''''''''''' 35.34$'''''''''''''' 0.30$'''''' (1.84)$''''' (1.53)$''''' (1.53)$'''''573.39$'''''''''''' 0.72$''''''''''''''''' 36.06$'''''''''''''' (0.42)$''''' (1.11)$''''' (1.53)$''''' (1.53)$'''''610.93$'''''''''''' 0.77$''''''''''''''''' 36.83$'''''''''''''' (1.19)$''''' (0.34)$''''' (1.53)$''''' (1.53)$'''''424.86$'''''''''''' 0.54$''''''''''''''''' 37.37$'''''''''''''' (1.73)$''''' 0.19$'''''' (1.53)$''''' (1.53)$'''''357.25$'''''''''''' 0.45$''''''''''''''''' 37.82$'''''''''''''' (2.18)$''''' 0.64$'''''' (1.53)$''''' (1.53)$'''''238.38$'''''''''''' 0.30$''''''''''''''''' 38.12$'''''''''''''' (2.48)$''''' 0.77$'''''' (1.71)$''''' (1.71)$'''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.41$'''''''''''''' (2.77)$''''' 0.77$'''''' (2.00)$''''' (2.00)$'''''222.38$'''''''''''' 0.28$''''''''''''''''' 38.69$'''''''''''''' (3.05)$''''' 0.77$'''''' (2.28)$''''' (2.28)$'''''234.01$'''''''''''' 0.29$''''''''''''''''' 38.99$'''''''''''''' (3.35)$''''' 0.77$'''''' (2.58)$''''' (2.58)$'''''238.77$'''''''''''' 0.30$''''''''''''''''' 39.29$'''''''''''''' (3.65)$''''' 0.77$'''''' (2.88)$''''' (2.88)$'''''175.45$'''''''''''' 0.22$''''''''''''''''' 39.51$'''''''''''''' (3.87)$''''' 0.77$'''''' (3.10)$''''' (3.10)$'''''154.72$'''''''''''' 0.19$''''''''''''''''' 39.71$'''''''''''''' (4.06)$''''' 0.77$'''''' (3.30)$''''' (3.30)$'''''142.78$'''''''''''' 0.18$''''''''''''''''' 39.89$'''''''''''''' (4.24)$''''' 0.77$'''''' (3.48)$''''' (3.48)$'''''131.90$'''''''''''' 0.17$''''''''''''''''' 40.05$'''''''''''''' (4.41)$''''' 0.77$'''''' (3.64)$''''' (3.64)$'''''121.84$'''''''''''' 0.15$''''''''''''''''' 40.21$'''''''''''''' (4.56)$''''' 0.77$'''''' (3.80)$''''' (3.80)$'''''112.55$'''''''''''' 0.14$''''''''''''''''' 40.35$'''''''''''''' (4.71)$''''' 0.77$'''''' (3.94)$''''' (3.94)$'''''103.96$'''''''''''' 0.13$''''''''''''''''' 40.48$'''''''''''''' (4.84)$''''' 0.77$'''''' (4.07)$''''' (4.07)$'''''96.02$'''''''''''''' 0.12$''''''''''''''''' 40.60$'''''''''''''' (4.96)$''''' 0.77$'''''' (4.19)$''''' (4.19)$'''''88.69$'''''''''''''' 0.11$''''''''''''''''' 40.71$'''''''''''''' (5.07)$''''' 0.77$'''''' (4.30)$''''' (4.30)$'''''81.91$'''''''''''''' 0.10$''''''''''''''''' 40.82$'''''''''''''' (5.17)$''''' 0.77$'''''' (4.41)$''''' (4.41)$'''''75.64$'''''''''''''' 0.10$''''''''''''''''' 40.91$'''''''''''''' (5.27)$''''' 0.77$'''''' (4.50)$''''' (4.50)$'''''

Short'Straddle'1'S&P'500

Table:'24

'$(7.00)'

'$(6.00)'

'$(5.00)'

'$(4.00)'

'$(3.00)'

'$(2.00)'

'$(1.00)'

'$G''''

'$1.00''

'$2.00''

1' 3' 5' 7' 9' 11' 13' 15' 17' 19' 21' 23' 25' 27' 29' 31' 33'

Short'Straddle'1'S&P'500'


Sell'A'Call'

Sell'A'Put'

Profit'

Actual'Profit'

Economy & Finance

Boeing 7E7 a financial analysis