A trader sells (or "writes", or "shorts") 100 European call options on a stock with a strike price of $23 and a time to maturity of one year. Each option is on one share of the stock. The price of each option is $4. One year later, the price of the underlying asset proves to be $28. What is the trader’s profit?\\n\\nNote: A gain is represented by a positive number, a loss is represented by a negative number. Please do not include any symbols other than the decimal point, such as the $ or % sign, or any text in your answer
A trader sells (or "writes", or "shorts") 100 European call options on a stock with a strike price of $23 and a time to maturity of one year. Each option is on one share of the stock. The price of each option is $4. One year later, the price of the underlying asset proves to be $28. What is the trader’s profit?\\n\\nNote: A gain is represented by a positive number, a loss is represented by a negative number. Please do not include any symbols other than the decimal point, such as the $ or % sign, or any text in your answer
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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A trader sells (or "writes", or "shorts") 100 European call options on a stock with a strike price of $23 and a time to maturity of one year. Each option is on one share of the stock. The price of each option is $4. One year later, the price of the underlying asset proves to be $28. What is the trader’s profit?\\n\\nNote: A gain is represented by a positive number, a loss is represented by a negative number. Please do not include any symbols other than the decimal point, such as the $ or % sign, or any text in your answer
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