A put on Sanders stock with a strike price of $35 is priced at $2 per share while a call with a strike price of $35 is priced at $3.50.The maximum per share loss to the writer of an uncovered put is __________ and the maximum per share gain to the writer of an uncovered call is _________.
A) $33.00; $3.50
B) $33.00; $31.50
C) $35.00; $3.50
D) $35.00; $35.00

Question

Quizplus · Accepted Answer

The maximum loss for the writer of an uncovered put is the strike price minus the premium received ($35 - $2 = $33). The maximum gain for the writer of an uncovered call is the premium received ($3.50).

A Put on Sanders Stock with a Strike Price of $35