1. You expect that the stock price of Kappa is expected to go up substantially. How to take advantage of this situation using a call option? How to do the same with only a put option?

2. Assume that you consider selling a call option on a stock that you already have in your portfolio. What is the name of this strategy? Explain the upside and downside of this position?

3. Assume you are looking at a call option on Bristol Cities Inc. with an exercise price of $104. The current stock price today is $102 and the option has a premium of $3. What will be the profit or loss earned by the speculator at prices of $101, $105, and $113 just before the time of expiry? Assume the option will not be exercised until maturity.