Question

(3 pts) Consider a June 2020 Call option contract on AA Co. with an exercise price...

  1. (3 pts) Consider a June 2020 Call option contract on AA Co. with an exercise price of $40 that sells for $2.20.
    1. If on the third Friday of June (the expiration date) the price of AA is as follows, fill in the chart below as is relates to the buyer of the contract.

Price in June                   Value of Option Contract              Profit/Loss for Buyer

$36                               ______________                         _______________

$42                               ______________                         _______________

$47                               ______________                         _______________

Homework Answers

Answer #1

Please refer to below spreadsheet for calculation and answer. Cell reference also provided.

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