Refer to the stock options on Microsoft in the Figure 2.10. Suppose you buy a November expiration call option on 100 shares with the excise price of $140.



Required:

a-1. If the stock price at option expiration is $144, will you exercise your call?

multiple choice 1
Yes
No


a-2. What is the net profit/loss on your position? (Input the amount as a positive value.)



a-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)



b-1. Would you exercise the call if you had bought the November call with the exercise price $135?

multiple choice 2
Yes
No


b-2. What is the net profit/loss on your position? (Input the amount as a positive value.)



b-3. What is the rate of return on your position? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)



c-1. What if you had bought the November put with exercise price $140 instead? Would you exercise the put at a stock price of $140?

multiple choice 3
Yes
No


c-2. What is the rate of return on your position? (Negative value should be indicated by a minus sign.)