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possibly fixed income and into pension and life insurance moncy under management, be said. Aetna will use derivatives to enhance yields and for risk reduction, and will trade futures for asset allocation. What does Mr. Chellew mean by "writing puts on stock Aetna doesn't mind buying"? 15. The following was overheard at a parly: You have to be foolish not to sell a call option on stock you own. You don't really lose anything because if the stock is called, you own it and just have to give it up. In return, you receive fee income that you get to keep no matter what the buyer of the call option does. It is a "can't lose" proposition, in my opinion. a. What type of strategy is this person suggesting? b. Is this view of call options correct? 16. The following is from an article titled "Analytic Uses Options to Protect Tenneco Posi- tion" that appeared in the November 16,1992, issue of Derivatives Week, p. 7: Analytic Investment Management in Irvine, CA., last Monday sold 70 Nov: 40 puts and bought 70 Feb. 35 puts on Tenneco for its Analytic Optioned Equity Funda derivatives driven mutual und, according to Chuck Dobson, the fund's executive vp. By selling and buying an equal number of exchange-traded puts, the firm maintained a fully-hedged position while using profits on its options to counterbalance paper losses on the 7.000 Tenneco share it owns for a net gain of 18 per option, Dobson said Though Dobson could not give the price at which the stock was bought, he noted that since