Use the MICROSOFT options contracts below to answer this question.

Consider the following options portfolio: Buy a July 2017 call option with exercise price $70 and write a July 2017 call option with exercise price $74.

a. What will be the profit/loss on this position if the stock price is $77 on the expiration date? What if the stock price is $67?

b. At what stock price will you just break even on your investment?

c. Graph the profit of this portfolio at expiration as a function of the stock price at that time

Microsoft (MSFT) price = $71.75 Underlying stock Expiration Strike Call Put June 16, 2017 70 2.02 0.24 June 16, 2017 72 0.67 0.90 June 16, 2017 74 0.13 2.37 70 2.40 0.58 July 7, 2017 July 7, 2017 July 7, 2017 72 1.15 0.42 1.32 2.59 74