You buy one Xerox June 60 call contract and one June 60 put contract. The call premium is $5 and the put premium is $3.
-Your maximum loss from this position could be
A)$500.
B)$300.
C)$800.
D)$200.
E)none of the above.

Question

Quizplus · Accepted Answer

The maximum loss occurs if the stock price is exactly $60 at expiration, where both options expire worthless. The total premium paid is $5 + $3 = $8 per share, and since each contract is for 100 shares, the maximum loss is $800.

You Buy One Xerox June 60 Call Contract and One