Multiple Choice
The combination of a position in a covered call and a position in a protective put on a stock index (where the options have the same strike and maturity) is similar to:
A) A leveraged long position in the stock.
B) A leveraged short position in the stock.
C) A long position in a balanced index fund (i.e., long stock and long investment at the risk-free rate) .
D) A short position in a balanced index fund. (i.e., short stock and borrowing at the risk-free rate) .
Correct Answer:
Verified
Correct Answer:
Verified
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