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You are cautiously bullish on a stock, currently priced at $10 per share. So, you buy 100 shares at $10 and sell a call option ("write a covered call option") with an exercise price of $12 for which you collect $1.20 per share.

You were wrong, and the company declares bankruptcy, wiping out your investment. How much money did you lose?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92096743

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