• Nizam has acquired a single unit of stock at a cost of RM$200.$ The current market value of a call option for this particular stock, which has a seven$-$ month expiration period and an exercise price of RM$210,$ is RM$12\mathrm{.}40.$Determine the profit on this strategy if the investor enters a covered call now and the stock price at expiration is RM$225.$

 

Answer rating: 100% (QA)

To calculate the profit on this covered call strategy we need to consider the initial cost of acquir... View the full answer