Current GM price is $24.20. If you have the choice to invest $24,200 either in GM shares or in call option on GM shares (Strike=$25), what is your loss if the share price goes down to $20? Draw a payoff diagram for the call option. Label on the graph the maximum loss possible and the break-even point. Read the appendix to find the figures you may need to answer the question
0,48 0,00 GM OPTIONS QUOTATION GM SHARE ON FEB 25: $24.20 CALL Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 12.50 GMIS.X 14.50 0 17.50 GMITX 10.80 0 20.00 GMID.X 6.40 32 22.50 GMIX X 4.58 200 25.00 GMIEX 3.25 220 27.50 GMIY X 2.28 235 30.00 GMIFX 1.60 40 32.50 GMIZ.X 1.05 27 35.00 GMIGX 0.54 31 37.50 GMIU.X 0.40 6 40.00 GMIH.X 0.19 15 42,50 GMIV.X 64 RNO OPTIONS QUOTATION RNO ON FEB 25: 71.67 CALL Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 70,00 1627A.PA 0,00 0 75,00 3127B.PA 2.000 85.00 1436C.PA 0 85,00 2781B PA 0,20 1.000 86,00 1501A PA 0,00 0 90.00 1898S PA 0,00 0 95.00 1435C.PA 0.18 46.000 95.00 24668 PA 0,11 3.000 100.00 4040S.PA 0,13 6.000 105.00 1434C.PA 0,26 48.000 105.00 2180B.PA 0,08 10.000 110.00 1666Z PA 0 110.00 3702252 PA 0,00 0 110.00 1413A PA 0,05 1.000 110,00 18888 PA 0 110,00 3576286 PA 0,15 1.000 110.00 1993H.PA 0,00 0 115.00 2666S PA 0,15 34.000 130.00 11888 PA 0,32 0 130.00 3439291 PA 0,32 0 130,00 2990S PA 0,10 150.000 0,00 0.12 0,15 PUT Expire at close Fri Sep 19, 2008 Strike Symbol Last Vol 10.00 GMUB.X 12.50 GMUS.X 15.00 GMUC.X 17.50 GMUTX 20.00 GMUD.X 22.50 GMUXX 25.00 GMUEX 27.50 GMUY X 30.00 GMUFX 32.50 GMUZ.X 35.00 GMUGX 37.50 GMUU.X 40.00 GMUH.X 42.50 GMUV.X 0.45 536 0.66 148 1.01 786 1.71 31 2.24 59 3.20 2,376 4.35 143 6.00 133 7.70 1 9.43 5 11.50 64 14.4 1 PUT Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 60,00 31298. PA 0,27 8.000 72,00 18998 PA 0,00 0 75.00 1669Z PA 1,30 3.000 75,00 1437C.PA 4.000 80,00 2469B.PA 0,80 1.000 82.00 4856S. PA 1,06 6.000 1,31 14.20 0 16.90 0 0,48 0,00 GM OPTIONS QUOTATION GM SHARE ON FEB 25: $24.20 CALL Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 12.50 GMIS.X 14.50 0 17.50 GMITX 10.80 0 20.00 GMID.X 6.40 32 22.50 GMIX X 4.58 200 25.00 GMIEX 3.25 220 27.50 GMIY X 2.28 235 30.00 GMIFX 1.60 40 32.50 GMIZ.X 1.05 27 35.00 GMIGX 0.54 31 37.50 GMIU.X 0.40 6 40.00 GMIH.X 0.19 15 42,50 GMIV.X 64 RNO OPTIONS QUOTATION RNO ON FEB 25: 71.67 CALL Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 70,00 1627A.PA 0,00 0 75,00 3127B.PA 2.000 85.00 1436C.PA 0 85,00 2781B PA 0,20 1.000 86,00 1501A PA 0,00 0 90.00 1898S PA 0,00 0 95.00 1435C.PA 0.18 46.000 95.00 24668 PA 0,11 3.000 100.00 4040S.PA 0,13 6.000 105.00 1434C.PA 0,26 48.000 105.00 2180B.PA 0,08 10.000 110.00 1666Z PA 0 110.00 3702252 PA 0,00 0 110.00 1413A PA 0,05 1.000 110,00 18888 PA 0 110,00 3576286 PA 0,15 1.000 110.00 1993H.PA 0,00 0 115.00 2666S PA 0,15 34.000 130.00 11888 PA 0,32 0 130.00 3439291 PA 0,32 0 130,00 2990S PA 0,10 150.000 0,00 0.12 0,15 PUT Expire at close Fri Sep 19, 2008 Strike Symbol Last Vol 10.00 GMUB.X 12.50 GMUS.X 15.00 GMUC.X 17.50 GMUTX 20.00 GMUD.X 22.50 GMUXX 25.00 GMUEX 27.50 GMUY X 30.00 GMUFX 32.50 GMUZ.X 35.00 GMUGX 37.50 GMUU.X 40.00 GMUH.X 42.50 GMUV.X 0.45 536 0.66 148 1.01 786 1.71 31 2.24 59 3.20 2,376 4.35 143 6.00 133 7.70 1 9.43 5 11.50 64 14.4 1 PUT Expire at close Fri, Sep 19, 2008 Strike Symbol Last Vol 60,00 31298. PA 0,27 8.000 72,00 18998 PA 0,00 0 75.00 1669Z PA 1,30 3.000 75,00 1437C.PA 4.000 80,00 2469B.PA 0,80 1.000 82.00 4856S. PA 1,06 6.000 1,31 14.20 0 16.90 0
