$12$:$12$

$4$G mobily

Assignment $2$

$15$

Question $(1)$

Marwan purchases a $6-$month European call option on a stock with a strike price of $$100.$ The premium for this option is $$10\mathrm{.}50.$ The effective interest rate for a $6-$month period is $4\%.$ Determine Marwan's payoff and profit at expiration if the spot price of the stock at expiration is $$120.$ Graph Marwan's payoff and profit at expiration.