Selling a Covered Call Option Is Comparable to Selling a Stock

question 20

True/False

Selling a covered call option is comparable to selling a stock short.

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Definitions:

Progressive

Relating to progressive policies or movements that advocate for change, reform, and innovation, often in the social, political, or economic sphere.

Elastic Demand

refers to a situation where the quantity demanded of a good or service is highly responsive to changes in its price.

Excess Burden

The economic loss to society due to market inefficiencies, often associated with taxes or other government policies that distort market behavior beyond the revenue raised or spending undertaken.

Net Worth

The difference between the total assets and total liabilities of an individual, company, or entity.