If stock is purchased at $50 and a $55 call is written for a premium of $2, the maximum possible gain per share is
A) $2
B) $5
C) $7
D) $10

Name: If stock is purchased at $50 and a $55 call is written for a premium of $2, the maximum possible gain per share is A) $2 B) $5 C) $7 D) $10
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Question

Quizplus · Accepted Answer

The maximum gain is calculated by adding the premium received ($2) to the difference between the call strike price ($55) and the purchase price ($50), which is $5. Therefore, the maximum gain is $5 + $2 = $7 per share.

If Stock Is Purchased at $50 and a $55 Call