Problem $10-8($LG $10-4)$

$2\mathrm{.}9$ You have written a call option on Walmart common stock. The option has an exercise price of $$88,$ and Walmart's stock currently points trades at $$86.$ The option premium is $$1\mathrm{.}30$ per contract.

a$.$ How much of the option premium is due to intrinsic value versus time value?

b$.$ What is your net profit if Walmart's stock price decreases to $$84$ and stays there until the option expires?

c$.$ What is your net profit on the option if Walmart's stock price increases to $$94$ at expiration of the option and the option holder exercises the option?

$($For all requirements, negative amounts should be indicated by a minus sign. Round your answers to $2$ decimal places. $($e$.$g$.,32\mathrm{.}16))$

Answer is complete but not entirely correct.

Complete this question by entering your answers in the tabs below.

Req $A$

Req $B$ and $C$

b$.$ What is your net profit if Walmart's stock price decreases to $$84$ and stays there untll the option expires?

c$.$ What is your net profit on the option If Walmart's stock price increases to $$94$ at expiration of the option and the option

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