Calculating Payoff Use the option quote information shown here to answer the que

Question

Calculating Payoff

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $45.

Suppose you buy 28 contracts of the February 47 call option. How much will you pay, ignoring commissions? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Suppose you buy 28 contracts of the February 47 call option and Macrosoft stock is selling for $48 per share on the expiration date.

On the expiration date, Macrosoft is selling for $41 per share. How much is your options investment worth? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

What is your net gain or loss if Macrosoft is selling for $42 at expiration? (A loss amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

What is your net gain or loss if Macrosoft is selling for $49 at expiration? (A loss amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

What is the break-even price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $45.

Explanation / Answer

a.

Cost=28*2.03=56.84

b-1.

=28*max(48-47,0)=28

b-2.

=28*max(47-47,0)=0  

c-1.

=28*(47-3.03)=1231.1600

c-2.

=28*(47-41,0)=168

c-3. On the expiration date, Macrosoft is selling for $41 per share. What is your net gain? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

=28*(6-3.03)=83.1600

P.S.: I am allowed to answer only 4 questions

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