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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!

image text in transcribedimage text in transcribed 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 Figure 2.10. 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 $142, will you exercise your call? Yes No a-2. What is the net profit/loss 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. Round your answer to 2 decimal places.)

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