URGENT PLEASE HELP

Cecilia is the CEO of Bintang Berhad and currently buy a call option of XX stock at the exercise price of RM10/share with the premium of RM2/share. She also sells a call option of YY stock at the exercise price of RM22/share with the premium of RM3/share. Both of the contract is for 2000 shares and she initiated the contract on 1st of May 2022 the contract is for 3 months.

Required:

a. What is the rationale for Cecilia buy and sell these option contracts? (4 marks)

b. When the market price for both option contracts increase by RM4, should Cecilia exercise her contract? Why? (Support with calculations).

(8 marks)

c. When ITM, OTM and ATM for both options? (You may suggest with the figures and proof with the calculation of payoff or profit/loss)

(8 marks)