Two portfolio managers are discussing option strategies. Connie Solis,
CFA, states that a covered call strategy preserves the upside potential
from appreciation in the underlying stock, while reducing the downside
risk. Lou Millwood, CFA, states that a protective put strategy has
unlimited upside potential, with potential losses limited to an amount
equal to the stock price minus the put premium. Are these statements
accurate?
A. Both of these statements are accurate.
B. Neither of these statements is accurate.
C. Only one of these statements is accurate.