financial economics

Problem 3 (10 points) Suppose that you plan to buy a call option of stock A expiring after 1 year selling for $15 with exercise price at $105. The possible stock price of stock A at expiration is listed in the following table. Stock price $90 $100 $110 $120 (a) Given different stock prices, compute the payoffs and profits of holding this call op- tion. (b) Given different stock prices, compute the payoffs and profits of writing this call op- tion. (c) What is the breakeven price for this call option? Draw a figure of call writer's pay- offs and profits. Explain why we say call writer's loss can be infinity