Net profit/loss at a particular stock price. Please WRITE OUT ALL STEPS. Giving me only the

final answer for profit/loss WILL NOT BE SUFFICIENT for the full credit. (50 points)

(2) Provide an option graph based on the stock price and profit (loss) data points that you calculated

in (1) and indicate: (i) the Breakeven price, (ii) the region where the option will be at-the-money,

(iii) the region where the option will be out-of-the-money; (iv) the region where the option will be

in-the-money (30 points)

(3) Indicate the maximum gain and maximum loss for the option position. (20 points)

Purchasing Put Options (LONG PUT). A put option on Iowa stock specifies an exercise price of

$50 and the premium on the put option is $8. Calculate the net profit or loss per share to be earned by

this long put position assuming that the stock price is as follows:

S

$40

$45

$50

$55

$60

final answer for profit/loss WILL NOT BE SUFFICIENT for the full credit. (50 points)

(2) Provide an option graph based on the stock price and profit (loss) data points that you calculated

in (1) and indicate: (i) the Breakeven price, (ii) the region where the option will be at-the-money,

(iii) the region where the option will be out-of-the-money; (iv) the region where the option will be

in-the-money (30 points)

(3) Indicate the maximum gain and maximum loss for the option position. (20 points)

Purchasing Put Options (LONG PUT). A put option on Iowa stock specifies an exercise price of

$50 and the premium on the put option is $8. Calculate the net profit or loss per share to be earned by

this long put position assuming that the stock price is as follows:

S

$40

$45

$50

$55

$60

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