Which of the Following Describes a Covered Call

question 13

Multiple Choice

Which of the following describes a covered call?

• A) A long call option on a stock plus a long position in the stock
• B) A long call option on a stock plus a short put option on the stock
• C) A short call option on a stock plus a short position in the stock
• D) A short call option on a stock plus a long position in the stock

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Definitions:

Unrealized Gains

Unrealized gains are increases in the value of investments or assets that have not yet been sold or converted into cash.

Trading Securities

Financial instruments held by a firm for the purpose of resale within a short period to generate income on short-term price differences.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, leading to its net profit or loss.

Interest Dates

The specific dates on which interest payments on a debt or investment are made to bondholders or lenders.