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A call with strike price of $40 on a stock that you have bought at $44 (this is a in the money covered call). The
A call with strike price of $40 on a stock that you have bought at $44 (this is a "in the money covered call"). The call premium is $7.00 (15 points).
a. What is the expiration net dollar profit or loss if the stock price ends at $0, $35, $40, $45 and $1,000?
b. What is the maxium potential loss from this protective call?
c. What is the maximum potential gain from this protective call? d. Find the break-even stock price (or prices).
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