Question: Table 3: Information on the Call Option Time Interval Call Option Contract is March 2021 on XYZ Common stock Call Option Exercise Price is $120

Table 3: Information on the Call Option

Time Interval

Call Option Contract is March 2021 on XYZ Common stock

Call Option Exercise Price is $120

Call Option Premium

Stock Price

Beginning: Time 1

$4.50

$118

Ending: Time 2

$6.50

$124.50

3.A. If you buy this call option in Time 1, how much will you have to pay for it?

3.B. If you sell this call option in time 2, how much will you get from it.

3.C. If instead of selling this call option in Time 2, you exercise it, what will be the result?

3.D. If instead of selling this call option in Time 2, you exercise it, will you gain or lose? Show your answer by calculations.

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