Question: In questions #7, and #8 assume that the initial margin requirement for writing a naked option is the premium plus 20% of the stock value

In questions #7, and #8 assume that the initial margin requirement

In questions #7, and #8 assume that the initial margin requirement for writing a naked option is the premium plus 20% of the stock value plus any necessary adjustments for not being at-the-money. Also assume the margin requirement for stock is 50%. 7. An investor buys a (naked) call option. The option price is $4 at a strike price of $50 and a stock price of $52. What is the investor's net cash outflow when entering into this trade? a. $4 b. $50 c. $400 d. $1040 e. $1440 8. An investor writes a (naked) call option. The option price is $4 at a strike price of $50 and stock price of $52. What is the investor's net cash outflow when entering into this trade? a. $50 b. $400 c. $520 d. $1040 e. $1440

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