Assume that you have shorted a call option on Intuit stock with a strike price of $31?; when you originally sold? (wrote) the? option, you received $5. The option will expire in exactly three? months' time.
a. If the stock is trading at $ 36 in three? months, what will your payoff? be? What will your profit? be?
b. If the stock is trading at $ 25 in three? months, what will your payoff? be? What will your profit? be?
c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration.
d. Redo ?(c?), but instead of showing? payoffs, show profits.