The following are option price quotations for The North WestCompany on July 27, 2019:
The North West Company stock market price $29.89
| Expiration Date | Type of option | Exercise Price | Option Premium |
| August 16, 2019 | Call | $30 | $0.40 |
| August 16, 2019 | Put | $30 | $0.5 |
a. What is the intrinsic value and time value for eachoption?
b. Calculate the breakeven share price for each option.
c. Suppose on July 27, 2019 you take the long position (buy) inone August 16, 2019 call option on The North West Company and holdyour position to the expiry date. Calculate your net profit giventhe following stock prices (Po) $ 20, 25, 30, 35, and 40.
d. Suppose on July 27, 2019 you take the short position (sell)in one August 16, 2019 put option on The North West Company andhold your position to the expiry date. Calculate your net profitgiven the following stock prices (Po) $ 20, 25, 30, 35, and 40.
