Writing Covered Calls May Result in a Profit to the Writer

question 60

True/False

Writing covered calls may result in a profit to the writer even if the share price does not change.

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Definitions:

Operating Characteristic Curve

The operating characteristic curve is a graphical representation used in quality control to depict the probability of accepting a lot given its level of quality or defect rate.

Type II Error

The error that occurs when a false null hypothesis is not rejected, also known as a "false negative" finding.

Population Mean

The average value of a property of the members of a population, which is a comprehensive collection of individuals or objects studied.

Null Hypothesis

A statement used in statistical testing that proposes there is no significant effect or difference, and any observed variation is due to chance.