The following table shows how increases in the given factors on the left affect

Question

The following table shows how increases in the given factors on the left affect the value of a put option. For each factor, indicate whether an increase in its value causes the value of the put option to increase or to decrease. Causes the Value of the Put Option To Increases in this factor Underlying stock price Exercise price Time to expiration Volatility Increase Decrease Which of the following best describes a covered option? When an investor sells call options without the stock to back them up When an investor writes call options against stock held in his or her portfolio

Explanation / Answer

Ans 1

ans 2=Covered option-when an investor writes call options against stocks held in his portfolio

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