1)

a) You purchase one WEED September call with a strike price of $120. The call premium is $5, and you hold the option until the expiration date when WEED stock sells for $122 per share. What is your profit or loss?

A.

A profit of $200

B.

A loss of $200

C.

A profit of $300

D.

A loss of $300

b)

The current stock price of Wildog Inc. (WI) is $50 per share. The price of a three-month call option on WI with a strike price (K) of $45 is $8.5, and a call with the same expiration date but with K=$55 is $2. If you establish an option position by buying a call with K=$45 and selling a call with K=$55, what is your profit or loss when the stock price at expiration is $53?

	A.	$150
	B.	$300
	C.	-$100
	D.	-$400