1.) Part (1) Option Quotations for the M&B Corporation are listed in the Wall Street Journal as follows: .............................................CALL.............PUT Closing.....Strike....EXP...Premium.....Premium 50.5............50.5......Jul........0.250...........0.100 50.5............50.5......Sep......0.400...........0.250 50.5............55.5......Aug......0.500.........5.70 50.5............60.5......Oct.......0.700.........10.9 50.5............65.5......Jun.....1.00............16.1 Closing represents the closing price per share of M&B on a particular trading day. Is the Sep Call in-the-money or out-of-the-money?_____ (answer with the word IN or the word OUT) Is the Jun Put in-the-money or out-of-the-money?______ (answer with the word IN or the word OUT) Part (2) How much would it cost in premiums to invest in an October (OCT) straddle on M&B? $ ______

2.) Options trade on the common stock of Taz, Inc. that have a strike price of $52.00 and a premium of $2.50. In each of the next four parts, calculate the net profit (or loss) on the option position, where net profit includes the premium in the calculation. You must get all four parts correct to receive credit. Part 1: Calculate the net profit or loss from BUYING a CALL option on Taz if at the time of expiration the price per share of Taz is $50.00. $ Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)). Part 2: Calculate the net profit or loss from WRITING a CALL option on Taz if at the time of expiration the price per share of Taz is $50.00. $ Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)). Part 3: Calcuate the net profit or loss from BUYING a PUT option on Taz if at the time of expiration the price per share of Taz is $50.00. $ Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)). Part 4: Calcuate the net profit or loss from WRITING a PUT option on Taz if at the time of expiration the price per share of Taz is $50.00. $

3.) A call option on MassComputer Corp. is trading with a strike price of $100 and an expiration date of November 18th at 4 pm in the afternoon. The premium paid on the call is $7.55. What is the net profit (where net profit includes the premium in the calculation) from buying the call just prior to 4 pm on November 18 if at this time the stock price per share of MassComputer is: a.$110.72 Answer:The net profit is $_____ b.$98.63 Answer:The net profit is $_____