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2. ABC's stock price is currently $40 per share. An at-the-money call option (X = $40) on ABC stock currently sells for $3, and an

2. ABC's stock price is currently $40 per share. An at-the-money call option (X = $40) on ABC stock currently sells for $3, and an at-the-money put option sells for $2. The options expire in 6 months.

a. Ignoring time value of money considerations, what are the profits or losses at expiration on a long call position, and on a short call position, at each of the following stock prices? What is the breakeven price of ABC stock for both positions? [2 points]

ST Profit on Long Call Profit on Short Call

20

30

40

50

60

Breakeven ST = ________

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