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What will be your overall gain or loss

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Problem 1 - Assume you sell 100 shares of Levis Corporation short at P72. You also buy a 70 call option for P5.25 to protect against the stock price going up.

a. If the stock ends up at P90, what will be your overall gain or loss?

b. If the stock ends up at P50, what will be your overall gain or loss?

Problem 2 - Assume you sell 100 shares of Alston Corporation short at P43. You also buy a 40 call option for P4.80 to protect against the stock price going up.

a. If the stock ends up at P60, what will be your overall gain or loss?

b. lf the stock ends up at P20, what will be your overall gain or loss?

Reference no: EM132855109

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