Hi all, I have two questions about the ‘payoff of an option strategies’, see
 The underlying is a stock priced at $40. A call option with an exercise price of $40 is selling for $7. You buy the stock and sell the call. At expiration, the stock price is
 $52. my thinking is 4040+7
 $38my thinking is 7+382
 The underlying is a stock priced at $60. A put option with an exercise price of $60 is priced at $5. You buy the stock and buy the put. At expiration, the stock price is
 $68my thinking is 68605
 $50.my thinking is 6050
However the answers are

52 – Max(0,52 – 40) = 40

38 – Max(0,38 – 40) = 38

68 + Max(0,60 – 68) = 68

50 + Max(0,60 – 50) = 60
Am I just not getting what pay off means right? It is how much you get with the option exercised, but shouldnt we consider the option investment and bond investment in the begining isnt that what pay off means?I see where the answer comes from, someone help me understand the question