A call option has an exercise price of $40 per share. If you bought the option for $3, draw a graph of the payout on the option as a function of the stock price. Label the graph.
| Stock Price | Payoff from Call 40 Strike (A) | Cost of Call Option (B) | Profit/(Loss) (A-B) |
| 30 | 0 | 3 | -3 |
| 31 | 0 | 3 | -3 |
| 32 | 0 | 3 | -3 |
| 33 | 0 | 3 | -3 |
| 34 | 0 | 3 | -3 |
| 35 | 0 | 3 | -3 |
| 36 | 0 | 3 | -3 |
| 37 | 0 | 3 | -3 |
| 38 | 0 | 3 | -3 |
| 39 | 0 | 3 | -3 |
| 40 | 0 | 3 | -3 |
| 41 | 1 | 3 | -2 |
| 42 | 2 | 3 | -1 |
| 43 | 3 | 3 | 0 |
| 44 | 4 | 3 | 1 |
| 45 | 5 | 3 | 2 |
| 46 | 6 | 3 | 3 |
| 47 | 7 | 3 | 4 |
| 48 | 8 | 3 | 5 |
| 49 | 9 | 3 | 6 |
| 50 | 10 | 3 | 7 |
| 51 | 11 | 3 | 8 |
| 52 | 12 | 3 | 9 |
| 53 | 13 | 3 | 10 |
| 54 | 14 | 3 | 11 |
| 55 | 15 | 3 | 12 |
| 56 | 16 | 3 | 13 |
| 57 | 17 | 3 | 14 |
| 58 | 18 | 3 | 15 |
| 59 | 19 | 3 | 16 |
| 60 | 20 | 3 | 17 |
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