I still don't see the trick in graphing P&L diagrams for questions relating to maturity now, 3 months from now and expiry. I will appreciate it if someone can help me work through the diagrams below to explain how the graphs were determined. Solution form Examiner's report I thought time decay meant that the value of the Option now should be greater that the value at expiry for all Strike prices. Doesn't seem to be the case here. I also need help with this combination of American and European calls. Solution from Examiner's report
