The Potential Loss for a Writer of a Naked Call

question 28

Multiple Choice

The potential loss for a writer of a naked call option on a stock is

• A)limited.
• B)unlimited.
• C)increasing when the stock price is decreasing.
• D)equal to the call premium.

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Definitions:

Metaphysical Logic

Philosophical reasoning that focuses on the nature of being, reality, and the universe beyond the physical or empirical.

Substantive Rationality

A type of rationality that focuses on outcomes and considers the values, ethics, and societal norms that guide action.

Practical Rationality

A form of reasoning and decision-making focused on achieving specific goals or outcomes using the most efficient means available.

Revolutionary Potential

The capacity or power of a person, group, or system to effect drastic or fundamental changes in societal structures and norms.