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# Today you bought one call option (i.e., long call) on LuckyCorp stock. The option price is \$6…

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Today you bought one call option (i.e., long call) on LuckyCorp stock. The option price is \$6 with an expiration date in 2 months and an exercise price of \$20. The current stock price is \$25.

– What is the Intrinsic Value of this option? What is its Time Value? Is this option At-The-Money, In-The-Money or Out-of-The-Money?

– LuckyCorp can have a stock price between \$0 to \$50 in 2 months, with increments of \$5. In other words, LuckyCorp’s stock price can be \$0, \$5, \$10……\$45 or \$50 in 2 months. Decide if you are you going to exercise the call option under each of these possible stock prices.

– Calculate the Payoff of this long call position at expiration for each possible stock price.

– Calculate the Profit of this long call position at expiration for each possible stock price.

– Plot your results from (3) and (4) together on one scatter chart to display Payoff and Profit functions of this long call position.