The writer of a naked call has

A) an unlimited potential loss

B) a specified potential loss

C) no chance of loss with this conservative strategy

D) unlimited potential gain

In the depths of a severe recession, Applewood Investments has noted signs indicating an economic recovery. They would most likely overweight which type of investment?

A) U.S. Treasury Bonds

B) High Yield (Junk) Bonds

C) Utility Stocks

D) Stocks with low betas.

Which factor might justify exercising an American call option before maturity?

A) High stock volatility

B) Dividends to be paid on the stock

C) A stock price below the exercise price

D) A solar eclipse

What is the difference between the Realized Compound Yield and the Yield to Maturity

A) nothing, they are two names for exactly the same thing

B) the realized compound yield is the yield to maturity divided by the bond's modified duration

C) the realized compound yield is the actual return calculated at the end of the investment, the yield to maturity is the anticipated yield at the beginning of the investment

D) they yield to maturity continues until the first call, the realized compound yield continues until the bond is paid off