You have purchased a call option contract on Johnson & Johnson common stock. The option has an exercise price of $90 and J&J stock currently trades at $90.43. The option premium is quoted at $2.17 per contract.

A. Calculate your net profit on the option if J&J's stock price rises to $94 and you exercise the option.

B. Calculate your net profit on the option if J&J's stock price falls to $89.50 and you exercise the option.

C. If J&J's stock price falls to $89.50 show that it is more profitable to exercise than not exercise the option you have purchased.