(Calculating call option payouts) (Related to Checkpoint 20.2 on page 682) Draw a profit or loss graph (similar to that in Figure 20.5) for a call contract with an exercise price of

$50 for which a $5 premium is paid. You may assume that the option is being evaluated on its expiration date. Identify the break-even point, maximum profit, and maximum loss.

Now draw the profit or loss graph assuming an exercise price of $55 and a $6 premium.