Refer to the following table.

Wal-Mart Stock PriceStrike PriceCallsPuts

69.50656.801.65

69.50703.503.45

69.50751.706.80

Suppose you buy a call option for $6.80 that matures in June with a strike price of $65.

(i)What is your dollar profit if the stock price in June is $70? What if it is $50? (4 Marks)

(ii)Calculate the rate of return. Now suppose you buy a put option for $1.65 that matures in June with a strike price of $65. (3 Marks)

Suppose you buy a call option for $1.65 that matures in June with a strike price of $65.

(iii)What is your dollar profit if the stock price in June is $70? What if it is $50? (4 Marks)

(iv)Calculate the rate of return. (2 Marks)

(b) Let's say that F (0, T) =$35 per barrel and S (T) =$33 per barrel. The forward contract covers 30000 barrels of corn oil. Which party, the one that bought the contract, or the one that sold the contract, made the profit? How much is the profit?