Question: I need help answer a question relating to call options 3 Calculating payoffs [L020.8] Use the following option quote to answer the questions below. 18

I need help answer a question relating to call options

3 Calculating payoffs [L020.8] Use the following option quote to answer the questions below. 18 Dec 20XX Weasel Ltd Last sale price $16.00 CALLSLAST PUTS LAST Strike price Jun July Aug Jun July Aug 6.00 36 cents 48 cents 72 cents 24 cents 27 cents_ 32 cents 3 Suppose you buy 100 July $16.00 call contracts. How much will you pay, b ignoring commissions? In part (a), suppose that Weasel is selling for $20 per share on the expiration date. What are your options worth? c Suppose you buy 20 of the Aug 20XX put contracts. What is your maximum gain? On the expiration date, Weasel is selling for $15.00 per share. What are y0ur options worth? d In part (c), suppose you sold your 20 Aug put contracts. What is your net gain or loss if Weasel is selling for $13.00? For $18? What is the break-even price; that is. the share price that results in a profit of zero? 1 nn'hninn ;&-:-:A .--L_- n Ann A

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