Question

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $44.

						Calls							Puts
Option and				Strike
NY Close	Expiration			Price		Vol.			Last				Vol.			Last
Macrosoft
		Feb		46			102			1.93				57			2.93
		Mar		46			78			2.17				39			3.34
		May		46			39			2.45				28			3.76
		Aug		46			20			2.66				20			3.80

a.	Suppose you buy 27 contracts of the February 46 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.)

Cost

$

Suppose you buy 27 contracts of the February 46 call option and Macrosoft stock is selling for $47 per share on the expiration date.

b-1.	How much is your options investment worth? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Payoff

$

b-2.	What if the terminal stock price is $46? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Payoff

$

Suppose you buy 27 contracts of the August 46 put option.

c-1.	What is your maximum gain? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Maximum gain

$

c-2.	On the expiration date, Macrosoft is selling for $40 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.)

Position value

$

c-3.	On the expiration date, Macrosoft is selling for $40 per share. What is your net gain? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.)

Net gain

$

Suppose you sell 27 of the August 46 put contracts.

d-1.	What is your net gain or loss if Macrosoft is selling for $41 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.)

(Click to select)GainLoss

$

d-2.	What is your net gain or loss if Macrosoft is selling for $48 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.)

(Click to select)GainLoss

$

d-3.	What is the break-even price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Break-even

$