William sells 10 CALL option contracts Each contract consists of 100 shares Exercise price $8.00 per share;

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William sells 10 CALL option contracts

Each contract consists of 100 shares

Exercise price $8.00 per share; Premium $1.50; Spot price at expiry $12.50

a) How much would William earn by selling the 10 contracts (ignoring brokerage costs?

b) Assuming the buyer exercises the options, calculate Williams loss?

Related Book For answer-question

Basic Finance An Introduction to Financial Institutions Investments and Management

ISBN: 978-1111820633

10th edition

Authors: Herbert B. Mayo

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Posted Date: May 12, 2023 01:52 AM

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William sells 10 CALL option contracts Each contract consists of 100 shares Exercise price $8.00 per share;

Question:

Expert Answer:

a To calculate Williams earnings from selling the 10 CALL option contracts we first ... View the full answer

Basic Finance An Introduction to Financial Institutions Investments and Management

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