Question: Assume we are talking about a call option on the S&P 100 stock index in which the multiplier is 100. Assume further, that the option costs $4.50.
(a) Create a payoff and profit table (using a range of stock prices from $430 to $470, in increments of $10) if the exercise price is $450. What is the breakeven stock price at maturity?
(b) Create a payoff and profit table table (using a range of stock prices from $630 to $670, in increments of $10) if the exercise price is $650. What is the breakeven stock price at maturity?