[Solved] Explain the process and implications of election certifications. Covered Option: Occurs when a trader writes (sells) an option while having the underlying position to cover the position in the event that the option is exercised. Naked Option: A risky investment strategy involving the selling of options contracts without owning the underlying asset or having a covering position. Dividend Policy: A company's strategy or policy in deciding the size and pattern of dividend payments to its shareholders. Payout Policy: The strategy a company uses to decide how much money it will distribute to shareholders through dividends or stock buybacks.