SIE Exam Question 972: Answer and Explanation

Question: 972

In a short call, the maximum gain is __________ and the maximum loss is __________.

• A. unlimited, the premium paid
• B. the premium paid, unlimited
• C. unlimited, unlimited
• D. limited, limited

Correct Answer: B

Explanation:

In a short call, the maximum gain is the premium paid and the maximum loss is unlimited.