Gustavo bought 12 call options on the stock of Cartswell Carts. The stock price is currently $61.75 per share. The strike price was $65, and the option premium was $2.50.

a. Do these options give Gustavo the right to buy or sell shares of the company? How many shares does he have the right to buy/sell?

b. Calculate the total amount Gustavo paid for these options.

c. Calculate his profi t or loss if the price rises to $75 a share.

d. Calculate his profi t or loss if the price rises to $65 a share.

e. Calculate his profi t or loss if the price drops to $55 a share