Call Option You have taken a long position in a call option on UBR common stock. The...

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Finance

Call Option
You have taken a long position in a call option on UBR commonstock. The option has an exercise price of $142 and IBM’s stockcurrently trades at $145. The option premium is $6 percontract.
a. What is your net profit on the option if UBR’s stock priceincreases to $150 at expiration of the option and you exercise theoption?
b. How much of the option premium you paid is due to intrinsicvalue and how much due to time value?
c. What is your net profit on the option if UBR’s stock priceincreases to $148?

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Call OptionYou have taken a long position in a call option on UBR commonstock. The option has an exercise price of $142 and IBM’s stockcurrently trades at $145. The option premium is $6 percontract.a. What is your net profit on the option if UBR’s stock priceincreases to $150 at expiration of the option and you exercise theoption?b. How much of the option premium you paid is due to intrinsicvalue and how much due to time value?c. What is your net profit on the option if UBR’s stock priceincreases to $148?