You write one MBI July 123 call contract (equaling 100 shares) for a premium of $9. You hold the option until the expiration date, when MBI stock sells for $127 per share. You will realize how big a profit or loss on the investment?

An investor purchases a long call at a price of $2.80. The strike price at expiration is $41. If the current stock price is $41.10, what is the break-even point for the investor?

The current stock price of Alcoco is $45, and the stock does not pay dividends. The instantaneous risk-free rate of return is 3%. The instantaneous standard deviation of Alcoco's stock is 30%. You want to purchase a put option on this stock with an exercise price of $50 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk. Assume 365 days in a year