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Closing price of the stock

Problem: Assume an investor writes a call option for 100 shares at a strike price of $40 for a premium of 6.5. This is a naked option.

1) What would the gain or loss be if the stock closed at $35?

2) What would the break-even point be in terms of the closing price of the stock?

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Finance Basics: Closing price of the stock

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Finance Basics: Closing price of the stock

Reference No:- TGS02061270

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