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NEW QUESTION: 1
Which of the following statements is not true about covered calls on stocks
A. A covered call is intended to benefit from stock prices not rising
B. In the event of the prices of the underlying falling, the losses of the holder of the covered call are reduced to the extent of the premium earned
C. A covered call is a position that includes a long stock position combined with a short call
D. The holder of a covered call theoretically faces unlimited losses in the event of a rise in the price of the underlying
Answer: D
Explanation:
Explanation
A covered call is an attempt to earn premium income by selling calls while protecting against the downside by holding long the underlying. In case prices rise, the holder of the covered call can give away the held underlying. In case prices fall or stay below the strike price of the sold call, the holder of the covered call gets to keep the premium.
The holder of the covered call will suffer a loss if the price of the underlying declines due to the long position held in the underlying. However, these losses will be partly offset by the premiums earned on the calls sold.
Choice 'd' does not represent a correct statement as in the event of a rise in the price of the underlying the holder of the covered call will lose any upside, but will not have unlimited losses. In the event of a decline in stock prices, his losses will be equal to the loss on the underlying, minus the premium earned.

NEW QUESTION: 2
A user asks a technician to connect a laptop dock to a large external monitor. Which of the following connections would carry both audio and video with the HIGHEST quality?
A. DVI-Integrated
B. DVI-Digital
C. USB 2.0
D. Displayport
Answer: A
Explanation:
Explanation/Reference:
Explanation: https://www.kensington.com/us/us/6838/universal-laptop-docking-station-monitor-connection- guide

NEW QUESTION: 3
The covariance of the market's returns with the stock's returns is .008. The standard deviation of the market's returns is .1 and the standard deviation of the stock's returns is .2. What is the correlation coefficient between the stock and market returns?
A. .91
B. .4
C. 1.0
D. 1.25
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Covariance = (standard deviation 1)(standard deviation 2)(correlation coefficient 1,2) Correlation coefficient
= cov/(st'd1)(st'd2) = .008/(.1)(.2) = .4