Assume you just bought 200 call contracts (each contract contains 100 shares) on shares of Company A. The options can be exercised in one years time at the strike price of $40. You paid $0.40 per option. The shares of the company are currently selling at $36 per share. If the company's share price rises to $43 in one years time, what will be your net gain from the call options?

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A company has a zero coupon bond issue with a face value of $2 million that matures in one year. The assets of the firm are currently valued at $3.2 million, but this amount is expected to either decrease to $2.5 million or increase to $3.8 million in a year's time. Assume the risk-free rate is 7%. What is the value of the equity?