Problem:
Writing call options. A call option on Illinois stock specifies an exercise price of $38. Today the stock's price is $40. The premium on the call option is $5. Assume that option will not be exercised until maturity, if at all. Complete the following table.
Assumed stock price at the time the call option is about to expire.
Net profit or loss per share to be earned by the writer (seller) of the call option
$34
39
41
43
45
48