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CFP® Practice Question: Reasons for Writing a Covered Call

Which of the following are logical reasons for writing a covered call?

(1)   To profit when stock prices increase

(2)   To utilize leverage

(3)   To provide additional income in a flat market

(4)   To provide additional gain while disposing of a long stock position

A. (1) only

B. (1) and (3) only

C. (1), (2), and (4) only

D. (3) and (4) only