Author Question: Draw the profit diagram for a short position in a call option on shares of Callahan Auto Parts. ... (Read 227 times)

audragclark · **on:** Apr 25, 2021

Question 1

Draw the profit diagram for a long position in a put option with a put premium of $2 and an exercise price of $35. What is the break-even stock price?
◦ $31
◦ $33
◦ $35
◦ $37

Question 2

Draw the profit diagram for a short position in a call option on shares of Callahan Auto Parts. Assume that the option is for one share of Callahan. The strike price for the option is $75. The option premium, today, is $5.00. The option expires in 3 months. The stock price for Callahan is currently $68. What is the maximum loss for the option position?
◦ $5
◦ $68
◦ $75
◦ Infinite

milbourne11 · **Reply #1 on:** Apr 25, 2021

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