Sam buys a call option on Amazon for a premium of $2. It has a strike (exercise) price of $25. If the current stock price of Amazon is $30, what is the total PROFIT (note, give the profit, not the payoff) if the option is immediately exercised?

• A. $2
• B. $3
• C. $5
• D. $7

Suppose you buy a put option for a premium of $5 and a strike price of $80. For the buyer of the put, what is the maximum profit possible (note: your answer should be the max profit not payoff)?

• A.

  $5

• B.

  $75

• C.

  $80

• D.

  $85