Investor A owns Company BB shares, currently trading at $350 per share. The investor believes that the share price of Company BB will move up and down, without showing any trend. He decides to write a call option on Company BBs shares, with an exercise price of $400, at a premium of $200. One call option consists of 100 shares. Additionally, the investor buys a put option on Company BBs shares, with an exercise price of $500, at a premium of $300. One put option consists of 100 shares. Hint: show all calculations when answering the following questions. Round off your final answers to two decimal places. 3.1 Reproduce and complete the table below to answer the questions that follow for each given market price:

Market price Intrinsic value Out-the-money, at-the-money, in-the-money $400 $500 $600

3.1.1 Calculate the intrinsic value of the call option and indicate whether the option is in, out, or at-the-money. (3) 3.1.2 Calculate the intrinsic value of the put option and indicate whether the option is in, out, or at-the-money. (3) 3.2 Upon expiration, Company BBs shares are trading at $350. Calculate the total profit or loss on the put and call options. (4)