420Several years ago, Sonja purchased 250 shares of Sugar Inc. at a price of $14 per share. Recently, shewrote a covered call for 250 shares of Sugar. The December call carries a strike price of $20 at a premiumof $2.25 per share. Ignoring commissions, if the call option is exercised, what is Sonja's total gain?O a) $ 937.50O b) $1,500.00O c) $2,062.50O d) $4,062.50

An option is a financial instrument that gives its owner the right (but not the obligation) to buy…

Answered: 42 Several years ago, Sonja purchased…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Two years ago, you purchased 100 shares of General Mills Corporation. Your purchase price was $56 a share, plus a total commission of $33 to purchase the stock. During the last two years, you have received the following dividend amounts: $1.40 per share for the first year and $1.50 per share the second year. Also, assume that at the end of two years, you sold your General Mills stock for $66 a share minus a total commission of $33 to sell the stock. Calculate the dividend yield for your General Mills stock at the time you purchased it. Note: Enter your answer as a percent rounded to 2 decimal places. Calculate the dividend yield for your General Mills stock at the time you sold it. Note: Enter your answer as a percent rounded to 2 decimal places. Calculate the total return for your General Mills investment when you sold the stock at the end of two years. Note: Do not round intermediate calculations. Round your final answer to the nearest whole number. Calculate the annualized…
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