SOFE
AFE · Question #155
Insurance entities usually write covered-call options because they consider the premium received for writing the options to be either:
The correct answer is B. a decrease in yield on the underlying risk security. See the full explanation below for the reasoning.
Question
Insurance entities usually write covered-call options because they consider the premium received for writing the options to be either:
Options
- Aan economic hedge between a decline in market price and security
- Ba decrease in yield on the underlying risk security
- CBoth A & B
- DNeither A nor B
How the community answered
(37 responses)- A14% (5)
- B76% (28)
- C8% (3)
- D3% (1)
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