Use the option quote information shown below to answer the questions that follow. The stock is currently selling for $31.

a. Suppose you buy 14 contracts of the February 32 call option. How much will you pay, ignoring commissions?

Suppose you buy 14 contracts of the February 32 call option and Macrosoft stock is selling for $34 per share on the expiration date. b-1. How much is your options investment worth? (Do not round intermediate calculations.)

b-2. What if the terminal stock price is $33? (Do not round intermediate calculations.)

Suppose you buy 14 contracts of the August 32 put option.

c-1. What is your maximum potential gain? (Do not round intermediate calculations.)

c-2. On the expiration date, Macrosoft is selling for $27 per share. How much is your options investment worth?

c-3. On the expiration date, Macrosoft is selling for $27 per share. What is your net gain?

Suppose you sell 14 of the August 32 put contracts. d-1. What is your net gain or loss if Macrosoft is selling for $29 at expiration?

d-2. What is your net gain or loss if Macrosoft is selling for $35 at expiration?

d-3. What is the break-even price, that is, the terminal stock price that results in zero profit?

Problem 17-2 Calculating Payoffs Use the option quote information shown below to answer the questions that follow. The stock is currently selling for $31 Option and Calls Puts Strike NY Close Expiration Price Vol. Last Vol. Last Macrosoft 89 65 FebruarY 32 32 32 August 32 63 44 1.63 .87 26 2.04 26 1.15 15 2.46 7 1.36 7 2.50 March May a. Suppose you buy 14 contracts of the February 32 call option. How much will you pay, ignoring commissions? (Do not round intermediate calculations.) Cost $ Suppose you buy 14 contracts of the February 32 call option and Macrosoft stock is selling for $34 per share on the expiration date b-1. How much is your options investment worth? (Do not round intermediate calculations.) Payoff $ b-2. What if the terminal stock price is $33? (Do not round intermediate calculations.) Payoff Suppose you buy 14 contracts of the August 32 put option c-1. What is your maximum potential gain? (Do not round intermediate calculations.) Maximum gain c-2. On the expiration date, Macrosoft is selling for $27 per share. How much is your options investment worth? (Do not round intermediate calculations.) Position value $ c-3. On the expiration date, Macrosoft is selling for $27 per share. What is your net gain? (Do not round intermediate calculations.)