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An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65 call @3. 18. What is the investor's maximum potential loss? A. $5,700 B. $6,300 C. $6,500 D. $6,800

An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65 call @3. 18. What is the investor's maximum potential loss? A. $5,700 B. $6,300 C. $6,500 D. $6,800

Essentials Of Investments
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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could you please help me resolve this one? i was confuse how to calculate this one.

how do we know the first one is 5700 rather than is 6800?

the second one is 800 rather is 700?

19.If the call is exercised when the market price of XYZ is 70, what is the investor's profit? A. $700 B. $800 C. $1,000 D. $1,200
Transcribed Image Text:19.If the call is exercised when the market price of XYZ is 70, what is the investor's profit? A. $700 B. $800 C. $1,000 D. $1,200
Use the following to answer questions 18-19. An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65 call @3. 18. What is the investor's maximum potential loss? A. $5,700 B. $6,300 C. $6,500 D. $6,800
Transcribed Image Text:Use the following to answer questions 18-19. An investor purchases 100 shares of XYZ at 60 and also writes an XYZ 65 call @3. 18. What is the investor's maximum potential loss? A. $5,700 B. $6,300 C. $6,500 D. $6,800
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