SIAA ADA Level 2 Practice Questions - SIAA Accredited Derivatives Adviser Level 2 (ADA2) Exam

Which of the following best describes the primary risk profile of a covered call writer?

Unlimited upside potential and limited downside risk. Limited upside potential and significant downside risk of the underlying stock. Unlimited downside risk and limited upside potential. Limited upside potential and no downside risk.

Correct Answer:

Limited upside potential and significant downside risk of the underlying stock.

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