Part A. Linda is evaluating option strategies that will allow her to profit from large moves in a stock’s price, either up or down. She buys a call option with an exercise price of $50 for $4, and a put option with an exercise price of $30 for $3, both options expiring in 6 months. The stock price is currently $50. What are the break-even points of her strategy?

A) $41, $59

B) $42, $58

C) $43, $57

D) $44, $56

Part B. Linda is also considering an alternative lower-cost strategy that would allow her to profit from large changes in the stock’s price. This involves buying a call option with an exercise price of $55 for $2.50 and buying a put option with an exercise price of $45 for $2, both options expiring in 6 months. The stock price is currently $50. What are the breakeven points of her alternative strategy?

A) $40, $59

B) $40.5, $59.5

C) $40, $59.5

D) $40.5, $59