Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor holds 100 shares of APPL stock, current price $160. The investor sells a January 180 strike call for $3. AAPL pays a $1

An investor holds 100 shares of APPL stock, current price $160. The investor sells a January 180 strike call for $3. AAPL pays a $1 dividend in July and another $1 dividend in December. If APPL trades above 180 at the option expiry date, what is the investor's return for this strategy?

A. 12.5% B. 3.1% C. 15.6% D. 2.8%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Ratio Analysis

Authors: Andrew P.C.

1st Edition

1973493381, 978-1973493389

More Books

Students also viewed these Finance questions

Question

Can workers be trained in ethics? How? Defend your answer.

Answered: 1 week ago