The following option prices were observed for a stock (non-dividend) for July 6 of a

particular year.

The stock is priced today at $165.13/ share. Assume interest rate=0%

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.

Call Premium Put Premium

Strike | Aug |Oct |Aug |Oct

$165| $5.25| $8.1 |$4.75| $6.75

Short one October 165 put contract. Hold it until the option expires. Determine the profits and graph the results. Identify the break-even stock price at expiration. What is the maximum gain and loss on this transaction?