Covered call by buying one share of stock

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Reference no: EM131131380

An investor writes a covered call by buying one share of a stock at $50 and selling a European call option on the stock with strike price $55 at $1.25. What is his profit if he holds his position until maturity of the option and the stock price is $45 then?

a. -$6.25

b. -$ 3.75

c. -$1.25

d. $1.25

e. $3.75

Reference no: EM131131380

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