Drawn first, then described: the GF561 Unit 2 payoff diagram exercise worked here covers six single positions on a composite share plus one pairing that shares a shape. Searches like "gf 561 unit 2 assignment example", "gf561 unit 2 sample" and "gf561 unit 2 example" land here.
What a finished GF561 Unit 2 payoff diagram exercise looks like
Seven small charts on a common grid, each with a caption, then a summary table. The supplied terms are a composite share trading at 60, a six-month expiry, a strike of 60, a call premium of 5.63, a put premium of 4.45 and a forward price of 61.21. Each chart plots profit at expiry against the share price from 40 to 80, with the premium shown as the vertical offset from the payoff line. Captions state the breakeven, the largest gain and the largest loss: 65.63 for the long call, 55.55 for the long put, and a loss of 21.21 at a price of 40 for the long forward. The seventh chart overlays a covered call, the share bought at 60 with the call sold, on a short put at the same strike.
How a GF561 Unit 2 example is structured
Each position gets the same four elements in the same order: the position stated in a phrase, the payoff formula at expiry, the chart and a two-sentence description. The formula comes before the line, so the maximum of the share price less 60 and zero, minus 5.63, is written out and then plotted, and the chart can be checked against it at any price. Descriptions use a fixed vocabulary: direction, where the kink sits, the slope on each side and where the line crosses zero. Short positions follow their long counterparts and are described as mirror images across the horizontal axis. After the six singles, a pairing section explains the parallel lines through put-call parity. The set ends on a summary table giving profit at 40, 50, 60, 70 and 80 for every position.
One box of supplied terms
Share price, strike, expiry, both premiums and the forward price sit in one box at the top, so all seven charts draw on the same supplied numbers.
Payoff formula, then chart
Each line is plotted from a written expression, which lets a grader confirm the long call at 70, a profit of 4.37, without measuring anything on the grid.
Mirrors across the axis
Short call and short put are drawn after their long versions, and each caption notes that the seller's gain is capped at the premium received.
A forward without a premium
The long forward line crosses zero at 61.21 rather than at 60, because six months of carry are already built into the agreed price.
Two lines 1.18 apart
Covered call and short put share a shape; the vertical gap equals the call premium less the put premium, which parity ties to six months of interest on the strike.
Where marks go in GF561 Unit 2
Payoff exercises lose most where a caption contradicts its own chart, a short put described as losing when the price rises, for instance, because graders read the words against the line. Plotting payoff when the prompt asked for profit, or the reverse, drops the premium and shifts every breakeven. A kink drawn at the breakeven rather than at the strike is a common error that looks almost right. Unlimited loss on a short call and a loss capped at the strike less the premium on a short put are expected in words, and papers that call both risks unlimited lose accuracy marks. Where the pairing appears, credit depends on explaining the 1.18 gap between the two lines rather than calling the positions identical.
Get a GF561 Unit 2 example written to your instructions
Whatever underlying, strikes and premiums the GF561 Unit 2 prompt supplies can travel with the rubric; mention it if charts must come from a spreadsheet. Every position is drawn from its formula and captioned in matching words, and the summary table is attached. The first custom sample, free, is generally ready in 24-48h.
GF561 Unit 2 questions, answered
Should my charts show payoff or profit?
Whichever your prompt names, labeled on the axis. Payoff ignores the premium and shows only what the position is worth at expiry, while profit subtracts what was paid or adds what was received. The sample plots profit and traces the payoff line lightly underneath, so a grader using either definition finds the answer without anything being redrawn.
Why does the forward line not cross zero at the spot price?
Because the forward price already includes the cost of carrying the share for six months. At a 4 percent rate that lifts 60 to 61.21, so the long forward breaks even there. The sample states this beside the chart; it is a small detail that prompts often test, and it previews the cost-of-carry pricing in the next unit.
Can I draw the diagrams by hand?
Many sections accept hand-drawn charts scanned into the document, provided the axes are labeled and every kink sits at a strike. The sample uses spreadsheet charts for precision, but grading turns on correct shape, clear labels and captions that match the lines. If your rubric names a format, the custom version follows it.