Ask Question
Yesterday, 05:13

Suppose you purchase one WFM May 100 call contract at $5 and write one WFM May 105 call contract at $2. The maximum loss you could suffer from your strategy is Select one:

a.$200.

b.$300.

c. zero.

d.$500.

+2
Answers (1)
  1. Yesterday, 05:30
    0
    The correct answer is B that is $300

    Explanation:

    The amount of maximum loss which is suffered from the strategy is computed as:

    Amount of maximum loss = (WFM May 100 call contract price + WFM May 105 call contract price) * 100

    = (-$5 + $2) * 100

    = - $3 * 100

    = - $300

    Note: Options contracts are for 100 shares of the stock, so the quoted premium is multiplied by 100.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose you purchase one WFM May 100 call contract at $5 and write one WFM May 105 call contract at $2. The maximum loss you could suffer ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers