The following option prices were observed for a stock for July 6 particular year. Ignore dividend and assume that the stock is priced at 165.13. The expirations are July 17, August 21, and October…

The following option prices were observed for a stock for July 6 particular year. Ignore dividend and assume that the stock is priced at 165.13. The expirations are July 17, August 21, and October 16. The continuously compounded risk-free rates are 0.0503, 0.0535, and 0.0571, respectively. The standard deviation is 0.21. Assume that the options are European. Possible stock prices at the expiration date are Rs 155, Rs 160, Rs 165, Rs 170, Rs 175 and Rs 180.

StrikeCallsPutsJulyAugOctJulyAugOct1652.705.258.102.401700.803.256.005.757.509.00

a. Buy one August 165 call contract. Hold it until the option expires. Determine the profits and graph the results. Identify the breakeven stock price at expiration. What are the maximum possible gain and loss on this transaction? b. Buy one October 165 put contract. Hold it until the options expire. Determine the profits and graph the results. Identify the breakeven stock price at expiration. What are the maximum possible gain and loss on this transaction? c. Buy 100 shares of stock and write one October 165 call contract. Hold the position until expiration. Determine profits and graph the results. Identify the breakeven stock price at expiration, the maximum profit, and the maximum loss. d. Buy 100 shares of stock and buy one August 165 put contract. Hold the position until expiration. Determine profits and graph the results. Determine the breakeven stock price at expiration, the maximum profit, and the maximum loss.