42 Several years ago, Sonja purchased 250 shares of Sugar Inc. at a price of $14 per share. Recently, she wrote a covered call for 250 shares of Sugar. The December call carries a strike price of $20 at a premium of $2.25 per share. Ignoring commissions, if the call option is exercised, what is Sonja's total gain? Oa) $ 937.50 Ob) $1,500.00 Oc) $2,062.50 Od) $4,062.50

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
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Several years ago, Sonja purchased 250 shares of Sugar Inc. at a price of $14 per share. Recently, she
wrote a covered call for 250 shares of Sugar. The December call carries a strike price of $20 at a premium
of $2.25 per share. Ignoring commissions, if the call option is exercised, what is Sonja's total gain?
O a) $ 937.50
O b) $1,500.00
O c) $2,062.50
O d) $4,062.50
Transcribed Image Text:42 0 Several years ago, Sonja purchased 250 shares of Sugar Inc. at a price of $14 per share. Recently, she wrote a covered call for 250 shares of Sugar. The December call carries a strike price of $20 at a premium of $2.25 per share. Ignoring commissions, if the call option is exercised, what is Sonja's total gain? O a) $ 937.50 O b) $1,500.00 O c) $2,062.50 O d) $4,062.50
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