The following option prices were observed for a stock for July 6 of a particular year. Use this information in questions 3 and question 4.

Ignore dividends on the stock. The stock is priced at 165.13. The expirations are August 21 and October 16 and the continuously compounded interest rates are 5.35% (from July 6^th to August 21^st) and 5.71% ( from July 6^th to October 16^th).

The options are European. In the following problems, determine the profits for possible stock prices of 150, 155, 160, 165, 170, 175, and 180. Answer any other questions as requested.

	Calls		Puts
Strike 165 170	Aug 5.25 3.25	Oct 8.1 6.0	Aug 4.75 7.5	Oct 6.75 9.00

Part A:

Buy 100 shares of stock and write one October 170 call contract. Hold the position until expiration. Determine the profits and graph the results. Identify the breakeven stock price at expiration, the maximum profits, and the maximum loss.

Part B:

Buy 100 shares of stock and buy one August 165 put contract. Hold the position until expiration. Determine the profits and graph the results. Determine the breakeven stock price at expiration, the maximum profit, and the maximum loss.