Respond to the following statements.a. “I’m a conservative investor. I’d much rather hold...

Respond to the following statements.

a. “I’m a conservative investor. I’d much rather hold a call option on a safe stock like Exxon Mobil than a volatile stock like Google.”

FIGURE 16.13 See Problem 2.

b. “I bought an American call option on Fava Farms stock, with an exercise price of $45 per share and three more months to maturity. Fava Farms’ stock has skyrocketed from $35 to $55 per share, but I’m afraid it will fall back below $45. I’m going to lock in my gain and exercise my call right now.”