Bill owns 200 shares of EG stock.In November, the market price of EG was $15.45.Bill sold two March 16 calls on EG for $246.Between November and March, EG stock fluctuated between $14.75 and $15.85.EG paid a quarterly dividend of $0.40 per share on January 31.Over the November-March period, Bill earned

Question

Quizplus · Accepted Answer

- The sale of two March 16 calls earned Bill $246.
- The stock price never exceeded $16, so the calls expire worthless.
- The dividend paid on 200 shares is $0.40 x 200 = $80.
- The stock price fluctuated between $14.75 and $15.85, so Bill did not sell any shares at a profit.
- Therefore, Bill earned $246 + $80 = $326.

Bill Owns 200 Shares of EG Stock