Reference no: EM131580688

Options trade on the common stock of Taz, Inc. that have a strike price of $51.25 and a premium of $2.75. In each of the next four parts, calculate the net profit (or loss) on the option position, where net profit includes the premium in the calculation.

You must get all four parts correct to receive credit.

Part 1: Calculate the net profit or loss from BUYING a CALL option on Taz if at the time of expiration the price per share of Taz is $53.50. $_____

Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)).

Part 2: Calculate the net profit or loss from WRITING a CALL option on Taz if at the time of expiration the price per share of Taz is $53.50. $______

Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)).

Part 3: Calcuate the net profit or loss from BUYING a PUT option on Taz if at the time of expiration the price per share of Taz is $53.50. $______

Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)).

Part 4: Calcuate the net profit or loss from WRITING a PUT option on Taz if at the time of expiration the price per share of Taz is $53.50. $ _____

Note: Negative Answers Go In With A Negative Sign (e.g. -4.50), not with parentheses (e.g. (4.50)).