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12 Jun 2019
Many individual investors employ a "buy-and-write" investment strategy that involves a long stock position and short call position. You implement the strategy by buying a stock at price $19.05 and writing a call with strike of $22.50 and option price of $3.20 . In one year you receive the stock's annual dividend of $0.75 and, furthermore, suppose the stock price has increased 20%. Find the rate of return for this buy-and-write strategy.
a. 42.4%
b. 56.5%
c. 62.1%
d. 51.4%
e. 46.7%
please show working out!!
Many individual investors employ a "buy-and-write" investment strategy that involves a long stock position and short call position. You implement the strategy by buying a stock at price $19.05 and writing a call with strike of $22.50 and option price of $3.20 . In one year you receive the stock's annual dividend of $0.75 and, furthermore, suppose the stock price has increased 20%. Find the rate of return for this buy-and-write strategy.
a. | 42.4% | |
b. | 56.5% | |
c. | 62.1% | |
d. | 51.4% | |
e. | 46.7% |
please show working out!!
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Keith LeannonLv2
15 Jun 2019