Use the option quote information shown here to answer the questions that follow.

Question

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $46.

Suppose you buy 29 contracts of the February 47 call option. How much will you pay, ignoring commissions?

Suppose you buy 29 contracts of the February 47 call option. Macrosoft stock is selling for $49 per share on the expiration date.

On the expiration date, Macrosoft is selling for $42 per share. How much is your options investment worth?

What is your net gain or loss if Macrosoft is selling for $42 at expiration? (Enter your answer as a positive value.)

What is your net gain or loss if Macrosoft is selling For $50 at expiration? (Enter your answer as a positive value.)

What is the break-even stock price? (Round your answer to 2 decimal places, (e.g., 32.16).)

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $46.

Explanation / Answer

a
29*2.13=61.77
b1
29*max(49-47,0)=58
b2
29*max(48-47,0)=29
c1
Max gain=unlimited
c2
29*max(47-42,0)=145
c3
145-29*4=29
d1
Net gain=29*min(42-47,0)+29*4=-29
d2
Net gain=29*min(50-47)+29*4=116
d3

breakeven=47-4=43

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