The Seller of a Call Option

question 134

Multiple Choice

The seller of a call option:

• A)has unlimited profit potential
• B)has a potential for profit that is limited to the option premium
• C)rarely makes a profit
• D)has positive intrinsic value when the S < X.
• E)More than one of these is correct.

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Definitions:

Grit

A personality trait characterized by perseverance and passion for long-term goals.

External Motivation

is the push or drive to perform a task or engage in an activity due to factors outside oneself, such as rewards or the avoidance of negative consequences, effectively a synonym for extrinsic motivations with an emphasis on its external nature.

Need to Belong

The inherent human drive to seek connections and interactions with others, considered a fundamental motivational force.

Secondary Emotion

Emotions that are more complex and are usually a response to a primary emotion; for example, feeling shame as a result of feeling fear.