Assume you have purchased a $

$1$

$8$

$$strike price AT&T

$($

$$

$)$

$$Call option at a Call option premium equal to $

$0$

$.$

$8$

$5$

$.$

$$This Call option has three months until expiration.

a

$.$

$$What is your maximum risk for this Call option?

b

$.$

$$What is your maximum reward for this Call Option

c

$.$

$$What is the expiration day breakeven level for this Call Option?

d

$.$

$$If T settles at $

$1$

$9$

$$on the Call Option expiration day, then what is your profit or loss?

e

$.$

$$If

$$

$$settles at $

$2$

$1$

$$on the Call Option expiration day, then what is your profit or loss?

f

$.$

$$If T settles at $

$1$

$7$

$$on the Call Option expiration day, then what is your profit or loss?

g

$.$

$$If you sold this Call option as an opening position, then what is your maximum risk for this Call option?

h

$.$

$$If you sold this Call option as an opening position, then what is your maximum reward for this Call Option

i

$.$

$$If you sold this Call option as an opening position, then what is the expiration day breakeven level for this Call Option?

Terminal Value of a Call Option

$=$

Max

$($

$$

$-$

$$

;

$0$

$)$