1. Draw a profit-loss graph for the following option strategy: Write a call, R3 premium, R40 exercise price Clearly label your graph. Show the maximum profit and break-even point. What is the maximum loss? 2. Nina has only a few hours left to decide whether to exercise a call option on Google stock. The call option has an exercise price of R54. Nina originally purchased the call six months ago for R400 (or R4 per share). (a) For what range of stock prices should Nina exercise the call on the last day of the call's life? (b) For what range of stock prices would Nina realise a net loss (including the premium paid for the call)?

1. Draw a profit-loss graph for the following option strategy: Write a call, R3 premium, R40 exercise price Clearly label your graph. Show the maximum profit and break-even point. What is the maximum loss? 2. Nina has only a few hours left to decide whether to exercise a call option on Google stock. The call option has an exercise price of R54. Nina originally purchased the call six months ago for R400 (or R4 per share). (a) For what range of stock prices should Nina exercise the call on the last day of the call's life? (b) For what range of stock prices would Nina realise a net loss (including the premium paid for the call)