You have bought $1$ share of stock for $$37\mathrm{.}7$ and $4$ call options on the same stock. Each option has an exercise price of $$40,$ cost $$3\mathrm{.}29$ each, and expires in three months.

Part $1$

What is your profit from buying the stock $($only$)$ if the stock price is $$20$ in three months $($in $$)?$ Ignore the options for now.

Part $2$

What is your profit from buying the options $($only$)$ if the stock price is $$50$ in three months $($in $$)?$ Ignore the stock for now.

$26\mathrm{.}84$

Correct $$

A B C D

$1$ Stock price $37\mathrm{.}7$

$2$ Call price $3\mathrm{.}29$

$3$ Strike price $40$

$4$ # of shares $1$

$5$ # of options $4$

$6$

$7$ Stock price Profit from shares Profit from calls

$80-37\mathrm{.}7-13\mathrm{.}16=($max$($A$8-$B$$3,0)-$B$$2)*$B$$5$

$910-27\mathrm{.}7-13\mathrm{.}16$

$1020-17\mathrm{.}7-13\mathrm{.}16$

$1130-7\mathrm{.}7-13\mathrm{.}16$

$12402\mathrm{.}3-13\mathrm{.}16$

$135012\mathrm{.}326\mathrm{.}84=($max$($A$13-$B$$3,0)-$B$$2)*$B$$5$

Part $3$

What is your total profit if the stock price is $$100$ in three months $($in $$)?$