The following information about a call option on iRobot Corporation stock (TICKER SYMBOL, IRBT) is taken from Yahoo! Finance for an expiration date of January 20, 2023, with a strike price of $55. The call option ask price is $22.50. Each option is for 100 shares of IRBT shares of stock. At the time (on 1/13/2022), the price of IRBT stock was $69.22.

a. What was the spot price for IRBT on 1/13/2022?

b. Suppose that you purchased 10 call options with a strike price of $55. How much would you pay for the 10 options?

c. Again, assume you purchased 10 call options with a strike price of $55. Suppose that at the expiration date for the option, January 20, 2023, the price of IRBT is $85 per share. What is the gain or loss you would realize?

d. Suppose that the price of IRBT at the expiration date is $30 per share. What is the gain or loss you would realize?

e. What would the price of IRBT stock price have to be on January 20, 2023, in order to break-even?

Answer rating: 100% (QA)

The detailed answer for the above question is provided below a The spot price fo... View the full answer