Suppose you buy call options on Microsoft stock. Each option is an American option that costs $2 and has a strike price of $40 and an expiration date of July 1. Discuss whether you would exercise the options in each of the following situations below. You must also provide an explanation to justify your actions.
A. It is March 1, and Microsoft’s stock price is $30.
B. It is March 1, and the stock price is $40.10.
C. It is March 1, and the stock price is $50.
D. It is June 30, and the stock price is $50.
E. It is June 30, and the stock price is $40.10.