eBook Problem 28-04 The price of a stock is $57, and a six-month call with a strike price of $55 sells for $5. Round your
eBook Problem 28-04 The price of a stock is $57, and a six-month call with a strike price of $55 sells for $5. Round your answers to the nearest dollar. What is the option's intrinsic value? $ What is the option's time premium? $ If the price of the stock falls, what happens to the price of the call? As the price of the stock falls, the value of the call -Select- . If the price of the stock falls to $46, what is the maximum you could lose from buying the call? Enter your answer as a positive value. $ What is the maximum profit you could earn by selling the call covered? $ If, at the expiration of the call, the price of the stock is $64, what is the profit (or loss) from buying the call? Enter your answer as a positive value. The -Select- from buying the call is $ . If, at the expiration of the call, the price of the stock is $64, what is the profit (or loss) from selling the call covered? Enter your answer as a positive value. The -Select- from selling the call covered is $ . If, at the expiration of the call, the price of the stock is $47, what is the profit (or loss) from buying the call? Enter your answer as a positive value. The -Select- from buying the call is $ . If, at the expiration of the call, the price of the stock is $47, what is the profit (or loss) from selling the call covered? Enter your answer as a positive value. The -Select- from selling the call covered is $ .
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