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What is the total profit if the stock price remain unchanged

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Question 1 - The stock recently closed at $51.11. Assume that you write a covered call on by writing a March call with a strike price of $55, and buying 100 shares at the market price. The option premium is $3.50 per stock.

1. What is the total profit if the stock price remain unchanged?

2. What is the total profit loss if the stock price goes up to $55?

3. What is the total profit loss if the stock price goes down to $48?

Question 2 - Tom Gettback buys 100 shares of Johnson Walker stock for $87.00 per share and a 3-month Johnson Walker put option with an exercise price of $105.00 for $20.00.

1. What is his dollar gain if at expiration the stock is selling for $80.00 per share?

2. What is Tom's dollar gain/loss if at expiration the stock is selling for $105.00 per share?

Reference no: EM133160439

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