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Consider a stock that you can purchase for $ 1 0 0 a share, a 1 1 0 , 1 - year call option can
Consider a stock that you can purchase for $ a share, a year call option can be sold for $ The stock pays a $ annual dividend. If you execute a covered call, and the stock is in the money at the expiration of the option, what is your rate of return on the position? What is your maximum downside exposure?
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