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Consider a stock currently trading at $ 6 0 . There is a call and a put option available at exercise price of $ 6
Consider a stock currently trading at $ There is a call and a put option available at exercise price of $ and a time to expiration of nine months. The call is priced at $ and the put at $ There are no dividends on the stock and the option is European.
Assume that all transactions consist of shares or one contract options Use this information to answer the following questions.
a Suppose the investor constructed a covered call position. At expiration the stock price is $ What is the investor's profit loss What is the maximum profit and maximum loss from the transaction? What is the breakeven stock price at expiration for the transaction?
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