Which of the Following Is NOT True for the Writer

question 41

Multiple Choice

Which of the following is NOT true for the writer of a call option?

• A) The maximum loss is unlimited.
• B) The maximum gain is unlimited.
• C) The gain or loss is equal to but of the opposite sign of the buyer of a call option.
• D) All of the above are true.

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Definitions:

Accounts Receivable Turnover

A financial metric that measures how efficiently a company collects on its receivables or the speed of their credit sale conversions into cash.

Receivables Collected

The amount of money received from customers in payment of accounts receivable during a given period.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and adjust the balance of accounts.

Uncollectible Accounts

Accounts receivable that are considered unlikely to be collected and written off as a loss.