Walden University Covered Call Options Questions

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Investments
Assignment 2 : Introduction to Covered Call Options
September 13th, 2021 (DUE Monday September 20th, 2021)
1. Pick a Stock that would be a good “Covered Call” candidate.
2. Identify an appropriate Call Option.
3. Purchase the Stock.
4. Sell the Call Option.
5. Calculate :
a. Cash Balance (Net cash outflow to make the trade – buy stock, sell option)
b. $ Profit if there is No Change in the Stock Price by Expiration
c. % Periodic Profit if there is No Change in the Stock Price by Expiration
d. % Annual Profit if there is No Change in the Stock Price by Expiration
e. $ Profit if Stock Price closes at the Option Strike Price at Expiration
f. % Periodic Profit if Stock Price closes at the Option Strike Price at Expiration
g. % Annual Profit if Stock Price closes at the Option Strike Price at Expiration
h. $ Profit if Stock Price closes $10 above the Option Strike Price at Expiration
i. % Periodic Profit if Stock Price closes $10 above the Option Strike Price at
Expiration
j. % Annual Profit if Stock Price closes $10 above the Option Strike Price at
Expiration
k. $ Profit or Loss if Stock Price closes $10 below the Option Strike Price at
Expiration
l. % Periodic Profit or Loss if Stock Price closes $10 below the Option Strike Price
at Expiration
m. % Profit or Loss if Stock Price closes $10 below the Option Strike Price at
Expiration

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Economy

Covered Call Options

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