A stock that has a current price of $50.

A six month European call option on this stock with an exercise price for $40 is selling for $13

A six month European put option on this stock with an exercise price for $70 is selling for $2.

a. If write (sell) one call option then at expiry in six month, what is

1. Maximum possible loss

2. Maximum possible gain

2. Break even stock price

b. calculate the pofit or loss to a written covered call for each of the following stock prices at expiry in six month.

1. $30

2. $50.

3. $70

4. $90