Question
For all call and put options, answer questions based on per share price, per share premium, and etc. Please be aware that the first question
For all call and put options, answer questions based on per share price, per share premium, and etc.
Please be aware that the first question is asking from the buyer of the call options point of view and the second question is asking from the seller of the put options point of view. Answering the questions from the wrong perspective will not be granted most of credits.
The market price for Alphabet Inc. (Ticker: GOOG) was $98.05 when Peter bought a call option today. The call premium is $4.15 and the exercise price is $105. The option will be expired on Dec. 16, 2022. (10 points)
a. Draw the contingency graph for Peter. Label x axis, y axis, each point/interaction on the graph.
b. What is the break-even point for Peter?
c. What are Peters maximum profit and maximum loss?
d. Show the profit/loss for Peter if, at the expiration date, the Alibaba price is (1) $90, (2) $108, and (3) $130.
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