Question
Consider a stock priced at $30. there are put and call options available at exercise prices of 30 and a time to expiration of six
Consider a stock priced at $30. there are put and call options available at exercise prices of 30 and a time to expiration of six months. The calls are priced at $2.89 and the puts cost $2.15. There are no dividends on the stock and the options are european. Assume that all transactions consist of 100 shares or one contract (100 options). suppose the investor constructed a cover call. At expiration the stock price is $27. What is the investor's profit? Also, what is the breakeven stock price?
a. $-11 and $27.11 b. $11 and $32.89 c. -$19 and $32.89 d. $19 and $32.89 e. none of the above
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