Question Details

1) You own a call option on a stock and the strike price of theoption is $30. The option has 3 weeks until expiration and thestock is currently priced at $35 per share. You paid $1 per putoption and you bought 1 put option. What is the largest payoutpossible for this call option? Ignore the original cost of theoption for the payment calculation.

2) Based on the information on the previous question, graph anet payoff diagram for one of the call options you purchased. Besure to label clearly including the break-even point.

3) You sold a call option on a stock and the strike price of theoption is $30. The option has 3 weeks until expiration and thestock is currently priced at $35 per share. You originally sold thecall option for $3. What is the largest payout possible for thiscall option?