You took a long position in a call option on M common stock. The option has an exercise price of $144 and M's stock currently trades at $148. The option premium is $6 per share. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit on the option if Ms stock price increases to $158 at expiration of the option and you exercise the option? c. What is your net profit if Ms stock price decreases to $138?

Req A How much of the option premium is due to intrinsic value versus time value?

Option Premium

Intrinsic value: Time value:

Req B and C What is your net profit on the option if IBMs stock price increases to $158 at expiration of the option and you exercise the option and if IBMs stock price decreases to $138? (Negative amounts should be indicated by a minus sign.)

b. Net profit per share c. Net profit per share