A covered call with a higher exercise price has a higher breakeven.

Name: A covered call with a higher exercise price has a higher breakeven.
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Question

Quizplus · Accepted Answer

This is true because when the exercise price is higher, the premium received from selling the call option is also higher. This means that the stock price would have to rise even more in order to reach the breakeven point where the premium received offsets the loss in stock price.

A Covered Call with a Higher Exercise Price Has a Higher