1 . You like the near term prospect of ABC Company and decide to buy the stock call options. The current stock price is $53. You will buy 10 contracts with $54 strike price and it expires in nine months. The call premium for each share is $1. 6 months later, the stock price increases to $56.

A) Whats the breakeven stock price for the call option?

B) Whats the option intrinsic value?

C) Whats the options payoff?

D)Draw an option pay-off diagram.