The following table provides premiums ($/share) for six CALL and PUT options for XYZ Corp., which ended the trading day at $179/share on March 9. The options expire on April 20. One option contract is equivalent to 100 shares. Strike Price $150 $155 $160 $170 $175 $180 CALL Option $30.37 $25.45 $20.85 $11.66 $7.75 $4.60 PUT Option $0.21 $0.30 $0.47 $1.39 $2.44 $4.25 a. Suppose that you had written (sold) the $180 CALL option on March 9, after you had purchased 100 shares of XYZ Corp. one month earlier for $155 per share. i. What benefit would you get from writing this CALL (i.e., selling a covered call option)? ii. What happens if XYZ Corp.'s share is trading at $170 on April 20 and had never risen above $179? Would you be happy with what you had done? Why or why not? What would be the profit or loss from your option position based on the scenario in (ii)? iv. Draw a diagram to show the pattern of profits from the short CALL option, the long stock position, and the net position, as a function of the stock price at expiration. b. Suppose that you have written a single naked $180 CALL option contract. Suppose XYZ Corp.'s stock price rises to $200 before April 20 and this contract is exercised. i. Will you make a profit or loss? How much? ii. Draw a diagram to show the pattern of profits for your option position. c. Suppose you purchased a $175 CALL option contract written by your classmate. i. What right does the option give you? ii. What obligation does your classmate have? iii. If the price of XYZ Corp. stock rises to $180 per share by April 20 would you exercise your option? What would be the profit or loss from your option position? iv. Draw a diagram to show the pattern of profits or losses for your option position. d. Suppose you bought the $180 PUT option contract. i. What must happen for you to make a profit from this option position? ii. What will the PUT option contracts be worth (i.e., intrinsic value) if the price of XYZ Corp.'s share falls to $150 per share by April 20? Why will the PUT option be worthless if XYZ Corp.'s share is trading at $185 per share on the expiration date and has never gone below 180? iv. Draw a diagram to show the pattern of profits for your option position