You have taken a long position in a call option on IBM common stock. The option has an exercise price of $139 and IBM's stock currently trades at $145. The option premium is $7 per contract.

a.	How much of the option premium is due to intrinsic value versus time value?

	Option Premium
Intrinsic value	$
Time value

b.	What is your net profit on the option if IBMs stock price increases to $155 at expiration of the option and you exercise the option? (Negative amount should be indicated by a minus sign.)

Net profit

$ per share

c.	What is your net profit if IBMs stock price decreases to $135? (Negative amount should be indicated by a minus sign.)

Net profit

$ per share