You Wrote a Covered Call with a Strike Price of $45

question 57

Multiple Choice

You wrote a covered call with a strike price of $45 and an option premium of $1.10.Assume the stock price is $44 a share currently and that it falls to $42 a share and remains at that price until the option expires.As a result,you will:

• A)lose an amount equal to the option premium.
• B)lose the option premium but get to keep the stock.
• C)keep both your stock and the option premium.
• D)keep the option premium but lose your shares of stock.
• E)lose both your stock and the option premium.

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