HSBC stock is currently trading at 475.8 (Pound sterling). George decides to write a covered call on
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HSBC stock is currently trading at £475.8 (Pound sterling). George decides to write a covered call on the stock by writing one call with a strike of £490 and buying 100 shares of stock at the current market price. The option premium he receives is £250. Assuming the stock does not pay any dividends until the expiration of the option:
a. What is the total profit if the stock price remains unchanged?
b. What is the total profit if the stock price goes up to £500?
c. What is the total profit if the stock price goes down to £450?
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Related Book For 
Fundamentals Of Investing
ISBN: 9780135175217
14th Edition
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
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