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Q6. A covered call position is equivalent to:
A) owning the stock and a long call.
B) owning the stock and a long put.
C) a short put.
Q7. The potential profits from writing a covered call position on a stock are:
A) limited to the premium.
B) limited to the premium plus stock appreciation up to the exercise price.
C) greater than the potential profits from owning the stock.
Q8. Given the covered call option diagram below and the following information, what are the dollar values for points X and Y? The market price of the stock is $70, the strike price of the call is $80, and the call premium is $5.
Point X Point Y
A) $80 $5
B) $75 $15
C) $80 $15
Q9. The profit/loss diagram for a covered call strategy looks like what other type of profit/loss diagram?
A) Long put.
B) Short call.
C) Short put.
Q10. Donner Foliette holds stock in Hamilton Properties, which is currently trading at $25.70 per share. On the advice of this investment advisor, he conducts a covered call transaction at a strike price of $30 and at a premium of $3.50. The advisor drew the following graph to help explain the transaction.
Which of the following statements about this transaction is least accurate?
A) The call buyer paid $3.50 for the right to any gain above $30.
B) If the stock price falls to $23, Foliette will gain $0.80 per share.
C) Foliette believes the stock will appreciate significantly in the near future.
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发表于 2009-3-2 12:35
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