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    What Is the Disadvantage of a Strategy of Rolling Over
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What Is the Disadvantage of a Strategy of Rolling Over

Question 2

Question 2

Multiple Choice

What is the disadvantage of a strategy of rolling over a covered call to avoid exercise?


A) the call premium is essentially thrown away
B) transaction costs tend to be high
C) the stock will incur losses
D) the call is more expensive when rolled over
E) none of the above

Correct Answer:

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