A covered call is created when an investor:

1. ASells a call without owning the stock
2. BOwns the stock and sells a call✓ Correct answer
3. CBuys a call and sells a put
4. DSells a put and buys a call

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• An investor who believes a stock's price will fall would most likely:
• Which statement is true about the buyer of a call option?
• If a put option is exercised, what must the seller of the put do?
• When does the seller of an option have the obligation to fulfill the contract?