In a Covered Call Strategy

question 8

Multiple Choice

In a covered call strategy:

• A) The gross payoff is greater than the net payoff.
• B) The gross payoff is equal to the net payoff.
• C) The gross payoff is smaller than the net payoff.
• D) None of the above is always true.

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Definitions:

Unbiased Estimator

A statistical estimator that, on average, equals the parameter being estimated.

Population Parameter

A population parameter is a numerical value that characterizes a certain aspect of a population, such as its mean or variance.

Expected Value

The long-term average value of a random variable, representing its mean outcome over an infinite number of trials.

Point Estimate

A single value that serves as the best guess or most likely value for a population parameter based on sample data.