Nothing
covered.put=function(S,K,r,t,sd,price=NA,plot=FALSE){
all=list(S,K,r,t,sd,plot,price)
#NULL
if(any(lapply(all,is.null)==T)) stop("Cannot input any variables as NULL.")
#Length
if(any(lapply(all,length) != 1)==T) stop("All inputs must be of length 1.")
#Numeric
num2=list(S,K,r,t,sd,price)
na.num2=num2[which(lapply(num2,is.na)==F)]
if(any(lapply(na.num2,is.numeric)==F)) stop("S, K, r, t, sd, and price must be numeric.")
#NA
nalist=list(S,K,r,t,sd,plot)
if(any(lapply(nalist,is.na)==T)) stop("Cannot input any variables, but price, as NA.")
#Logical
stopifnot(is.logical(plot))
NA.Neg=array(c(S,K,r,t,sd,price))
NA.Neg.Str=c("S","K","r","t","sd","price")
app=apply(NA.Neg,1,is.na)
#Positive
na.s=which(app==F & NA.Neg<=0)
if(length(na.s)>0) {errs=paste(NA.Neg.Str[na.s],collapse=" & ")
stop(cat("Error: '",errs, "' must be positive real number(s).\n"))}
#Infinite
na.s2=which(app==F & NA.Neg==Inf)
if(length(na.s2)>0) {errs=paste(NA.Neg.Str[na.s2],collapse=" & ")
stop(cat("Error: '",errs, "' cannot be infinite.\n"))}
if(is.na(price)){
d1 = (log(S/K)+(r+sd^2/2)*t)/(sd*sqrt(t))
d2 = d1 - sd * sqrt(t)
putP = K*exp(-r*t) * pnorm(-d2) - S*pnorm(-d1)} else putP=price
stock=seq(0,K,length.out=6)
stock=c(stock,round(seq(K,K*2,length.out=6)))
stock=unique(round(stock))
payoff=rep(0,length(stock))
profit=rep(0,length(stock))
for(i in 1:length(stock)){
if(stock[i]<=K) payoff[i]=S-K
if(stock[i]>K) payoff[i]=S-stock[i]
profit[i]=payoff[i]+(putP)*exp(r*t)
}
if(plot==T){
lpos="bottomleft";m="Covered Put\nPayoff and Profit"
plot(stock,profit,type="l",xlab="Stock Price",main=m,ylab="$",
ylim=c(min(profit,payoff),max(profit,payoff)),xaxt='n',yaxt='n',lwd=2,col="steelblue")
lines(stock,payoff,lty=2,lwd=2,col="firebrick")
abline(h=0,lty=2,col="gray")
y=round(seq(min(payoff,profit),max(payoff,profit),length.out=8))
axis(2,at=y,labels=y,las=2)
axis(1,at=stock)
legend(lpos,c("Profit","Payoff"),lty=c(1,2),col=c("steelblue","firebrick"),lwd=c(2,2)) }
out1=data.frame(stock,payoff,profit)
names(out1)=c("Stock Price","Payoff","Profit")
out=list(Payoff=out1,Premium=putP)
return(out)
}
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