Joel specializes in option strategies for ABC investments. she employs strategies to construct positions with limited risk, to profit from future volatility estimates, and to exploit arbitrage opportunities.

shares of DEF are currently trading at 38 and the following option quotes are for 3-month options:

35 call $4.50

40 call $1.50

35 put $1.80

40 put $3.50

The covered call strategy for DEF with the lowest breakeven price has a profit/loss at an expiration stock price of 37 is equal to:

A) $1.50, B) -$1.00, C) -$1.50, D) $3.50