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