Homework Five Part One: Build a model which allows the user to choose an option type and give the relevant information. The model will display a table and graph giving the user the value and...

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Homework Five Part One: Build a model which allows the user to choose an option type and give the relevant information. The model will display a table and graph giving the user the value and profit/loss over a range of stock values. The user will be able to select from among the following options: 1. Call 2. Put 3. Straddle 4. Strangle 5. Call Spread 6. Put Spread The user will input: 1. Option Premium 2. Number of Options 3. Strike · The user will be able to input different option amounts for the call and put spreads so the call (or put) spread can be a 1x2 or 1x3 call or put spread. · Allow user to select the option. · Allow user to input option details. Provide table which gives the user both the value and the profit/loss of the option over a range of stock values. The stock values should adjust based on the strike price(s) of the option(s). · Graph the value and profit/loss of the option. Part 2: Option Pricing Calculator 1. Build a “dashboard” where the user inputs: 1. Expiry date (allow up to 61 day maturity) 2. Interest rate (we can use 1.00% for all pricing) 3. Strike price 4. Stock price 5. Implied Volatility (expressed as an annualized standard deviation) 6. Barrier (if applicable) 7. Payout (if applicable) Type of option: 1. Call 2. Put 3. Down and Out Call 4. Down and In Call 5. Up and Out Put 6. Up and In Put 7. One Touch Up (European) 8. One Touch Down (European) 2. Build a “stock tree”. The stock tree will adjust based on the number of days until expiry for the option. The stock tree will start with terminal values the stock can take using the binomial model. The stock tree is built using a binomial model. Each day the price of the stock can move up or down by Implied volatility/sqrt(365). 3. Calculate the values of the options listed above given the user inputs. You may calculate them by building an “option tree” or by using the value of another option to calculate it. For example, you may build a call tree to calculate the value of the call and then use put-call parity to calculate the value of a put.