A $22 strike, three month call option on this stock is written by a market maker, $5.55

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A $22 strike, three month call option on this stock is written by a market maker, $5.55 is the option's price.
At the same time, one share of the underlying stock is bought by the market maker.

4% is the continuously compounded, risk-free interest rate.

Calculate the final value of the stock price at which the market maker will break even?

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Introduction to Corporate Finance What Companies Do

ISBN: 978-1111222284

3rd edition

Authors: John Graham, Scott Smart

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Posted Date: Feb 03, 2023 05:59 AM

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A $22 strike, three month call option on this stock is written by a market maker, $5.55

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The breakeven stock price for the market maker is ca... View the full answer

Introduction to Corporate Finance What Companies Do

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