Exercise price

One month ago you purchased a put option on the S&P500 index with an exerciseprice of $910 at $1.00. Today is the expiration date and the index is at $900.96. Willyou exercise the option? What will be your pro¯t?2. Suppose that you purchased a call option with a strike price of $30 and paid a premiumof $6.(a) Draw a graph of your payoff and profit would be at expiration for stock prices inthe range of $10 to $70.(b) Now assume that instead of buying the call you wrote the option. Draw a graphof your payoff and profitt would be from this perspective.

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