An Investor Who Is Long an Over-The-Counter Call Option Is

question 31

True/False

An investor who is long an over-the-counter call option is exposed to the risk that the call writer will default on her obligations should the call option end up in-the-money.

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Definitions:

Company Profitability

A measure of how effectively a company generates profit from its operations, often assessed through ratios such as net margin.

Quality Circles

Small groups of employees who meet regularly to discuss and propose solutions to workplace problems, aiming to improve organizational performance and work environment.

Gainsharing Programs

Employee incentive plans that provide a share of the company’s profits based on performance metrics.

Scientific Management

A management theory developed by F.W. Taylor aiming at improving economic efficiency and labor productivity through systematic study of work methods and processes.