Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There are put and call options available at exercise prices of 30 and a time to expiration of six months. The calls are priced at $2.89 and the puts cost $2.15. There are no dividends on the stock and the options are European. Assume that all transactions consist of 100 shares or one contract (100 options).

(**Please post full work for both questions, I am seeing different answers online for both - I thought (5) was $11 and (6) was $289

5.

Suppose the buyer of the call in problem 1 sold the call two months before expiration when the stock price was $33. How much profit would the buyer make?

a. $32.89

b. $30.11

c. $78.00

d. $11.00

e. none of the above

6.

Suppose the investor constructed a covered call. At expiration the stock price is $27. What is the investor's profit?

a. $589

b. $289

c. $2,989

d. $2,711

e. none of the above

8.

If the transaction described in problem 6 is closed out when the option has three months to go and the stock price is at $36, what is the investor's profit?

a. $600

b. $311

c. $889

d. $229

e. none of the above