Answers

1. $23000

   The probable maximum loss “PML” is the most loss an insurer might sustain in a certain area before going bankrupt. The PML is the total loss that an insurer would anticipate suffering under a certain policy. The amount of loss from a specific hazard or collection of perils that will equal or surpass, in a given proportion of all situations, the total worth of the property is the probable maximum loss for that property.

   The investor pays $48 per share for the stock and receives $2 for selling the calls. The maximum loss is $48 per share minus the option premium collected, or ($48 − $2) × 500 shares = $23,000.

   Here’s another question with an answer similar to this about probable maximum loss: https://brainly.com/question/14918443

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