For the Writer of In-The-Money Covered Calls , Losses on the Options

question 37

True/False

For the writer of in-the-money covered calls , losses on the options contract will be nullified by gains on the stock.

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Definitions:

Signal-detection Theory

A means to quantify the ability to discern between information-bearing patterns and random patterns that distract from the information.

Correct Rejection

In signal detection theory, the accurate identification that a signal is not present.

False Alarm

An erroneous alert or notification indicating the presence of a threat or condition that in reality does not exist.

Miss

To fail to hit, reach, catch, or otherwise make contact with something; also used to express a feeling of loss or absence.