Maximum potential profit of strategy, Finance Basics

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Maximum potential profit of strategy

Suppose you purchase one IBM May 100 call contract at $5 and write one IBM May 105 call contact at $2. One contract contains 100 options.

What is the maximum potential profit of your strategy?

If, at expiration, the price of a share of IBM stock is $103, how much would be your profit?

What much is the maximum loss you could suffer from your strategy?

What is the lowest stock price at which you can break even?

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Finance Basics: Maximum potential profit of strategy

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Finance Basics: Maximum potential profit of strategy

Reference No:- TGS056188

Have a Question? (oR Write a Review)

Recent Questions Asked Finance Basics

Q : Make a financial statement analysis

Q : Problem based on distribution of the land

Q : Framework from uniform commercial code

Q : Statement with respect to the stock redemption

Q : Maximum potential profit of strategy

Q : Statements about unsystematic risk

Q : Positive net-present-value tax benefits

Q : Problem on project operating cash flow

Q : Problem on nal of the lease

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Request for Solution File

Ask an Expert for Answer!!

Finance Basics: Maximum potential profit of strategy

Reference No:- TGS056188

Recent Questions Asked Finance Basics

Q : Make a financial statement analysis

Q : Problem based on distribution of the land

Q : Framework from uniform commercial code

Q : Statement with respect to the stock redemption

Q : Maximum potential profit of strategy

Q : Statements about unsystematic risk

Q : Positive net-present-value tax benefits

Q : Problem on project operating cash flow

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