You have purchased a call option on Kimberly Clark common stock. The option has an exercise price of $89 and Kimberly Clark's stock currently trades at $90.43. The option contract fee is $2.17.

a. Calculate your net profit on the option contract if Kimberly Clark's stock price rises to $94 and you exercise the option.

b. Calculate your net profit on the option contract if Kimberly Clark's stock price decreases to $89.5 and you exercise the option.

c. If Kimberly Clark's stock price falls to $89.5 show that it is more profitable to exercise the option than not exercise the option you have purchased.