If an investor owns 100 shares of XYZ and buys 1 XYZ put option, this strategy is known as:

1. ACovered call
2. BProtective put✓ Correct answer
3. CNaked call
4. DShort straddle

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• A customer buys 1 ABC May 50 call and 1 ABC May 50 put. This position is called a:
• Which of the following best describes a covered call?
• An investor buys a call with a $40 strike and sells a call with a $45 strike. This is a:
• What happens to an option that is out-of-the-money at expiration?