Question
The following options are available on the stock you are concerned about; all have the same expiry date: Option contract Exercise Price Premium Call R110
The following options are available on the stock you are concerned about; all have the same
expiry date:
| Option contract | Exercise Price | Premium |
| Call | R110 | R4 |
| Put | R95 | R3 |
If the initial purchase price on the share is R100, determine the profit of a Covered Call and a Protective Put when the share price (i) drops to R90; and (ii) rises to R120. (20 marks)
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Personal Finance
Authors: E. Thomas Garman, Raymond Forgue
8th Edition
0618471421, 9780618471423
