Consider a stock priced at $30 with a standard deviation of 0.3. The risk-free rate is 0.05. There are put and call options available at exercise prices of 30 and a time to expiration of six months. The calls are priced at $2.89 and the puts cost $2.15. There are no dividends on the stock and the options are European, Assume that all transactions consist of 100 shares or one contract (T00 options). Use this information to answer questions through 10. 1. What is your profit if you buy a call, hold it to expiration and the stock price at expiration is $37? $700 S289 $2,711 $411 none of the above What is the breakeven stock price at expiration on the transaction described in problem I? $32.89 1.00 $27.11 $32.15 there is no breakeven a b c d e 2. a b c. d e. 3 What is the maximum profit on the transaction described in problem 17 $2,711 2 b. infinity c. zero d $3,289 c. $3,000 What is the maximum profit that the writer of a call can make? 8 $2,711 b $289 $3,000 d $3,289 e none of the above a C. e. What is the breakeven stock price at expiration for the transaction described in problem 6? $27.11 b $30.00 $32.89 d $29.89 none of the above If the transaction described in problem 6 is closed out when the option has three months to go and the stock price is at $36, what is the investor's profit? $600 b. $311 $889 d. $229 none of the above 8. a. C. e. 9. a. What is the maximum profit from the transaction described in Question 6 if the position is held to expiration? $3,289 I b. $289 infinity d. $2.711 none of the above c. e. 10. a What is the minimum profit from the transaction described in Question 6 if the position is held to expiration? -$2,711 b. -$3,289 -$3,000 d. negative infinity none of the above c. e. 11. Consider two put options differing only by exercise price. The one with the higher exercise price has the lower breakeven and lower profit potential the lower breakeven and renter profitnotential a