respond to the following questions:

1. Use the data about the pricing of a put and a call on a selected stock and create “Profit Graphs.” Make sure you show the numbers on the graph and discuss when the buyers of calls or puts are in the money or out of the money.
2. How VaR relates to Puts? Explain in detail
To get put and call pricing use: http://www.cboe.com/delayedquote/quote-table
3. Create a portfolio of stocks
a. Use the securities you selected to find the VaR of your portfolio with \$100,000,000 investment.
b. Find the stock stressing the portfolio through stress analysis and sensitivity analysis
c. Now change the distribution of this one stock by truncating the loss to eliminate the 5% VaR. You do this since you bought a put option that protects you against a loss of 5% for the one stock that is stressing the portfolio the most (based on the stress analysis you conducted).
i. When you do truncation, you will use: =RiskLaplace(0.025384,0.13748,RiskTruncateP(0.05,1),RiskName(“NVIDIA”),RiskCorrmat(RISKCorrelations,4)) (see example)
4. Show the results of the portfolio’s VaR and stress analysis with the Put option from part 1
5. How are the results with the put options changed? (use the truncation).
6. Explain every step in your own words. Connect between the put you selected and the VaR. What did you save buying the put? Compare to the cost of the Put (You are doing cost/benefit analysis).
Note: All the above should include correlation