An investor buys 100 shares of stock at $45 and simultaneously writes a $50 call for...

  

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An investor buys 100 shares of stock at $45 and simultaneously writes a $50 call for a premium of $3. If the stock's price subsequently declines to $40 and the call expires, what would the investor lose from this strategy if he or she sells the stock? (A) nothing (B) $200 (C) $300 (D) $500 An investor in the 30 percent marginal income tax bracket can earn 5 percent interest on a tax-free municipal bond. What rate of interest on a taxable bond would provide approximately the same after-tax return? Go (A) 5.86 percent (B) 6.94 percent (C) 7.14 percent (D) 7.56 percent An investor buys 100 shares of stock at $45 and simultaneously writes a $50 call for a premium of $3. If the stock's price subsequently declines to $40 and the call expires, what would the investor lose from this strategy if he or she sells the stock? (A) nothing (B) $200 (C) $300 (D) $500 An investor in the 30 percent marginal income tax bracket can earn 5 percent interest on a tax-free municipal bond. What rate of interest on a taxable bond would provide approximately the same after-tax return? Go (A) 5.86 percent (B) 6.94 percent (C) 7.14 percent (D) 7.56 percent

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