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Terms of the closing price of the stock

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Assume an investor writes a call option at a strike price of $50 for a premium of $4. This is a naked option.

a. What would be the gain or loss if the stock price closed at $30? What if it closed at $60?

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

c. What is the maximum gain you may have?

d. What is the maximum loss you may have?

Reference no: EM132499722

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