Break-even point be in terms of the closing price of stock

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Reference no: EM131078177

Assume an investor writes a call option for 100 shares at a strike price of 30 for a premium of 5.75. This is a naked option.

a. What would the gain or loss be if the stock closed at 26?

b. What would the break-even point be in terms of the closing price of the stock?

Reference no: EM131078177

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