Question
Suppose we want to chart the profit or loss of a covered call. The stock is purchased at $75 a share. The call premium is
Suppose we want to chart the profit or loss of a covered call. The stock is purchased at $75 a share. The call premium is $3.45 and has a strike price of $80.
At a stock price of $80 a share, what are our total gains or losses per share with this strategy?
| A. | Gain of $5.00 | |
| B. | Gain of $8.45 | |
| C. | Gain of $1.55 | |
| D. | Loss of $1.55 |
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Contemporary Financial Management
Authors: R. Charles Moyer, William J. Kretlow, James R. Mcguigan
8th Edition
0324065914, 9780324065916
