What is the initial investment

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Reference no: EM133120420

Suppose that call options on a stock with strike prices $55 and 3 month maturity costs $6. Suppose the current stock price is $54.

(a) How can those securities be used to create a covered call?

(b) What is the initial investment?

(c) Construct a table that shows the payoffs and profits for the covered call when the stock price in 3 months is $46, and $58, respectively.

Reference no: EM133120420

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