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FIGURE 2.10 Stock options on Microsoft, September 4, 2019 Note: Microsoft stock price on this day was $137.49 Source: Compiled from data downloaded from Yahoo!

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FIGURE 2.10 Stock options on Microsoft, September 4, 2019 Note: Microsoft stock price on this day was $137.49 Source: Compiled from data downloaded from Yahoo! Finance. Refer to the stock options on Microsoft in the Suppose you buy a November expiration call option on 200 shares with the excise price of $135. Required: a-1. If the stock price at option expiration is $143, will you exercise your call? Yes No a-2. What is the net profit/oss on your position? (Input the amount as a positive value.) a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Hound your answer to 2 decimal places.) (x) Answer is complete but not entirely correct. b-1. Would you exercise the call if you had bought the November call with the exercise price $130 ? Yes Q No b-2. What is the net profit/loss on your position? (Input the amount as a positive value.) Answer is complete but not entirely correct. b-3. What is the rate of return on your position? (Negative value should be indicated by a minus slgn. Round your answer ta 2 decimal places.) c-1. What if you had bought the November put with exercise price $135 instead? Would you exercise the put at a stock price of $135? Yes No c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.) Answer is complete and correct

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