2. The stock price will be down by two thirds to: 9.17/share. HW No. one. Spring 2010 1. The official expiration dates are SAT immediately following the third Friday of the expiration months: SEP 19 2009; OCT 17 2009; JAN 16 2010; APR 17 2010: 2. The stock price will be down by two thirds to: 9.17/share. The adjustment associated with the options: All the exercise prices are divided by 3 and then adjusted to the nearest 1 cent, (or 1/8th) as follows: [nearest 1/8] 20/3  6.67/share [6.625] 25/3  8.33/share [8.375] 27.5/3 9.17/share [9.125] 30/3  10.00/share [10.00] 32.5  10.83/share [10.875] 35 10.67/share [10.625] The adjustment associated with the number of shares covered by the options may be done in two ways: 1. The number of shares in every option may be multiplied by 3 to 300, OR 2. The number of options is multiplied by 3 and each (still) covers 100 shares. Just like the stock price, the market reaction will bring the premium to one third of their value and adjusted to the nearest cent.

4. All the prices below are per share: HW No. one. 3. All the prices below are per share: Initial cost S at expiration exercise Revenue Profit/Loss a. 3.80+.50 =4.30 35 call only 10.00 Profit 5.70 b. 3.80+.50=4.30 20 put only 5.00 Profit 0.70 c. 3.80+.50=4.30 25 Neither 0 Loss 4.30 4. All the prices below are per share: Will be Initial CF S at expiration exercised Revenue Profit/Loss a. 3.80+.50 =4.30 35 call only -10.00 Loss 5.70 3.80+.50=4.30 20 put only -5.00 Loss 0.70 3.80+.50=4.30 25 Neither 0.00 Profit 4.30 5. All the prices below are per share: Initial CF S at expiration exercise Cash Flow at T -2.40+1.30 = -1.10 36.50 call 30 6.50 call 32.5 -4.00 TOTAL: 2.50 Profit: -1.10 + 2.50 = 1.40 6. Initial CF S at expiration exercise Revenue Profit/Loss - 4.20+8.75 = 4.55 36.50 none** 0 Profit: 4.55 ** Both puts expire out-of-the money and will not be exercised.