At expiration if the price of the stock is 60 and the value of a call...

Question

Question

At expiration if the price of the stock is 60 and the value of a call option is $7 per share quoted price then the value of t

Answer 1

Answer #1

Given, Price of the stock, S_T= $60.

Value of the call option = (S_T - X ) =$7.

Value of a covered call = S_T - Max [ 0, S_T - X ]

= 60 - Max [0,7]

= 60 - 7

=$53.

Answer 2

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