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.

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

S_T Profit on Long Put Profit on Short Put

20

30

40

50

60

Breakeven S_T = ________