Please, match options payoffs with corresponding names of positions.  (a)Answer 1 Question 5(b)Answer 2 Question 5(c)Answer 3 Question 5(d)Answer 4 Question 5

To properly match the options with their corresponding names of positions, it's important to follow a structured approach. Here's how you can do it:

1. Identify the Context

Understand what "options payoffs" and "positions" refer to in this context. This typically relates to financial derivatives or stock options, where positions may include calls, puts, long or short positions, and so on.

2. Recognize the Options Payoffs

Options payoffs can be summarized as follows:

• Call Option: A financial contract giving the owner the right to buy an asset at a specified price before a certain date.
• Put Option: A financial contract giving the owner the right to sell an asset at a specified price before a certain date.
• Long Position: Buying an asset with the hope that it will increase in value.
• Short Position: Selling an asset with the hope to buy it back at a lower price.

3. Match the Options to Positions

You need to evaluate each option and observe where the payoff corresponds with the risk and reward associated with the position.

Example Matching:

1. Answer 1: This might correspond to the Long Call, where the payoff is positive if the asset price exceeds the strike price.
2. Answer 2: This could represent the Long Put, where the payoff is positive when the asset price is below the strike price.
3. Answer 3: Potentially matches with Short Call, where the payoff is limited to the premium received.
4. Answer 4: Perhaps aligns with the Short Put, where substantial risk exists if the asset price drops significantly.

4. Verify the Matches

Ensure that each match logically aligns with the respective payoff of the positions based on typical market behavior and payout structures.

Final Answer

Based on a structured analysis, your matches could look like this:

• (a) Answer 1: Long Call
• (b) Answer 2: Long Put
• (c) Answer 3: Short Call
• (d) Answer 4: Short Put

This matches the options payoffs with their corresponding position names effectively, ensuring clarity and understanding of how each position behaves in market scenarios.