Problem 2.13 Chapter 2 Suppose the stock price is $40 and the effective annual interest rate is 8%. a) Draw on a single graph payoff and profit diagrams for the following options (i) 35-strike-call with premium $9.12 (ii) 40-strike-call with premium $6.22 (iii) 45-strike-call with premium $4.08 b) Consider your payoff diagram with all three options graphed together. Intuitively, why should the option premium decrease with the strike price