1. Suppose GM is selling for $38.60 per share and call options on GM with a strike price of $37.20 are $1.00 per share each. (4 points)
   • Cost of buying 100 shares of GM: $3,860
   • Cost of buying one call option contract: $100
   • Suppose further that the option expires in three months.
   • Finally, lets say that in three months, the price of GM shares will either be: $40, $38, or $36.

1. Calculate the payoff, profit and percentage return of 100 shares of GM stock at each of the three prices at the end of three months.
2. Calculate the payoff, profit and percentage return of one call option at each of the three prices at the end of three months.