Question: please do all math work. please graph by hand not computer if possible. thank you! 2.13 Suppose the stock price is $40 and the effective

please do all math work. please graph by hand not computer if possible. thank you!

2.13 Suppose the stock price is $40 and the effective annual interest rate is 8%. a. Draw on a single graph payoff and profit diagrams for the following options: (i) 35-strike call with a premium of $9.12. (ii) 40-strike call with a premium of $6.22. (iii) 45-strike call with a premium of $4.08. b. Consider your payoff diagram with all three options graphed together. Intu- itively, why should the option premium decrease with the strike price

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