Report Components Your report should cover the following points: 1) Descriptio

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Report Components
Your report should cover the following points:
1) Description of Political Event
– Provide a detailed description of the chosen political event, including its significance and the uncertainty surrounding itsoutcome.

2) Investment Position
– Describe your hypothetical investment position in the selected equity security prior to the event.

3) Option Strategy Design
– Define your option strategy based on historical data, specifying option premiums, strike prices, and option maturity (hypothetical options are acceptable).
– Explain the rationale behind your strategy design.

4)Theoretical Payoffs
– Use charts to illustrate the theoretical contingent payoffs of your option strategy.

5)Option Pricing
– Calculate the fair price of your option strategy using the Black-Scholes-Merton option pricing model.

6)Profit & Loss Analysis
– Based on realized historical data, analyze the profit and loss of your strategy at its maturity date.

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