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You own a call option on Intuit stock with a strike price of $32. When you purchased the option, it cost $4. The option will
You own a call option on Intuit stock with a strike price of $32. When you purchased the option, it cost $4. The option will expire in exactly three months' time. a. If the stock is trading at $41 in three months, what will be the payoff of the call? What will be the profit of the call? b. If the stock is trading at $22 in three months, what will be the payoff of the call? What will be the profit of the call? c. Draw a payoff diagram showing the value of the call at expiration as a function of the stock price at expiration. d. Redo c, but instead of showing payoffs, show profits. and the profit of the call is $| a. The payoff of the call is $ (Round to the nearest dollar.) and the profit of the call is $ b. The payoff of the call is $ (Round to the nearest dollar.) c. Choose the correct diagram below. A. B. 20- 10- 10- 0- 10 20 30 40 50 60 10 20 30 40 50 60 70 80 -10- -20- Stock Price at Expiration ($) Stock Price at Expiration ($) D. 20- 20- 10- 10- e of the Call ($) 0- 10 20 30 40 50 60 CY 10 20 30 40 50 60 d. Choose the correct diagram below. C A. B 20- 10- 10- 10 20 30 40 50 60 10 as 40 50 60 -10- -10- -20- Stock Price at Expiration ($) Stock Price at Expiration ($) O E. 207 203 109 10- 0- Profit of the Call ($) 50 60 70 80 10 20 40 50 60 -107 -10- -200 Stock Price at Expiration ($) Stock Price at Expiration ($)
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