1. What will be the proceeds and net profits to an investor who purchases the July expiration Dell calls with an exercise price of $245 if the stock price at expiration is $260? What if the stock price is $195? Suppose the premium is $7.54. Draw the payoff graphs for the buyer and writer.
2.Suppose the previous problem had instructed you to purchase a put with the same exercise price and premium? What would the proceeds and profit be at stock price of $260 and $195? Draw the payoff graphs for buyer and writer.