Multiple Choice
Suppose you are managing a stock portfolio currently valued at $2 million that has a portfolio beta of 1.40 and you are interested in call option overwriting to raise additional funds. If the S&P 100 index recently closed at 541.86 and a February 580 OEX 100 call option contract has a premium of 7.30, what is the maximum amount of funds you could generate by writing calls on a cash account basis using the stock portfolio as collateral?
A) $18,980
B) $26,280
C) $33,580
D) $40,880
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Index options have little _ risk.<br>A) unsystematic<br>B)
Q3: Writing a covered call results in a
Q4: If someone writes an in-the-money naked call,
Q5: Assume the stock price is $50, a
Q6: Suppose a stock is currently priced at
Q8: The most common motivation for option overwriting
Q9: Which of the following is true for
Q10: Which of the following strategies has the
Q11: Assume the stock price is $50, a
Q12: Suppose a stock is currently priced at