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Explain How Writing Option Contracts (Both Puts and Calls) Can

question 24

Essay

Explain how writing option contracts (both puts and calls) can generate income for owners of the underlying stock.


Definitions:

RRSPs

Registered Retirement Savings Plans, a type of financial account in Canada for holding savings and investment assets to support retirement.

Reduced Pension

A retirement plan that provides beneficiaries with lower benefits than originally anticipated or agreed upon.

Contributory Pension Plans

Retirement plans where both the employer and employees contribute to the fund that will be used to provide retirement benefits to the employees.

Contributions

The act of giving or adding to something larger, often refers to financial contributions in a business or investment context but can also apply to contributions of time, effort, or resources.

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