A Covered Call Position Is

question 42

Multiple Choice

A covered call position is

• A) the simultaneous purchase of the call and the underlying asset.
• B) the purchase of a share of stock with a simultaneous sale of a put on that stock.
• C) the short sale of a share of stock with a simultaneous sale of a call on that stock.
• D) the purchase of a share of stock with a simultaneous sale of a call on that stock.
• E) the simultaneous purchase of a call and sale of a put on the same stock.

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Definitions:

Merchandise Inventory

Products that a retailer, wholesaler, or distributor has on hand to sell to customers.

Cash Effect

The impact of any transaction on a company's cash and cash equivalents, indicating how the transaction alters the company's liquidity.

Accounts Receivable

Funds due to a company from its clients for products or services already provided but still unpaid.

Cash Effect

The impact of a business transaction on the cash and cash equivalents held by the company, reflecting how an event affects its liquidity.