CAN YOU RESPOND QUICKLY PLEASE --- 1- John Paulson is a portfolio manager with TechPlus Investments, a U.S.-based financial asset management firm. John is considering using options to enhance portfolio returns and control risk. He asks his junior analyst, Tommy Hilfiger, to help him. Hilfiger collected and summarize the relationship between a European call option and various factors that might impact the call option value in the following table. Table Impact of Increasing the Variables on call option value Variables Impact on call option value Stock price Increase Strike Price Decrease Maturity Increase Volatility Increase Interest rate Increase Dividend Increase Which of the relationships shown in the Table is incorrect?

Impact of Increasing the Variables on call option value
Variables	Impact on call option value
Stock price	Increase
Strike Price	Decrease
Maturity	Increase
Volatility	Increase
Interest rate	Increase
Dividend	Increase

(Choose the best answer) Maturity and Dividend Volatility and Stock Price Exercise price and stock price Stock Price and Interest Rate Risk-free rate and Volatility

Maturity and Dividend

Volatility and Stock Price

Exercise price and stock price

Stock Price and Interest Rate

Risk-free rate and Volatility

2 -

The stock price of GameStop is currently $110 and the call option with strike price of $125 is $4. A trader purchases 300 shares of the stock and short 3 contracts of call options.

a. What is the maximum potential loss for the trader? (sample answer format: $25,000) b. If the stock price is $130 with the call option at expiration, what is the traders net profit?

3-

A one-year call option on a stock with strike price of $90 costs $6 and a one-year put option on the same stock with strike price of $90 costs $7. Suppose that a trader buys one call option and one put option.

a. What is the breakeven stock price, above which the trader makes a profit? (sample answer:$125) b. What is the breakeven stock price, below which the trader makes a profit?