What is your breakeven terminal stock price

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Reference no: EM131962621

You set up a Covered Call position on a stock currently priced at $105, using the following call option: [C(S0=$105, T=2 months, X=110)] that has a current price of $3.30 in the market Scale by one option contract.

A. What are your holdings for this position?

B. Assume you hold the position to option expiration.What is your breakeven terminal stock price?

C. Assume you hold the position to option expiration.What is your maximum profit, in dollars?

D. At what terminal stock price would you be indifferent between a “long stock only” position and this “Covered call” position? (meaning that you would make the same profit, in dollars, for both positions).

Reference no: EM131962621

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