The Combination of a Position in a Covered Call and a Position

question 12

Multiple Choice

The combination of a position in a covered call and a position in a protective put on a stock index (where the options have the same strike and maturity) is similar to:

• A) A leveraged long position in the stock.
• B) A leveraged short position in the stock.
• C) A long position in a balanced index fund (i.e., long stock and long investment at the risk-free rate).
• D) A short position in a balanced index fund. (i.e., short stock and borrowing at the risk-free rate).

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Definitions:

Weiner's

refers to the attribution theory of motivation developed by Bernard Weiner, which explains how individuals attribute causes to successes and failures.

Achievement Motivation

The drive to pursue and attain goals or standards of excellence, often characterized by persistence and effort.

Personalism

A philosophical stance emphasizing the importance of human persons and their roles in the universe, ethics, and society.

Achievement Oriented

Focused on setting and accomplishing specific goals to achieve success.