Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'covered call'?

A. option giving the buyer (holder) the right, but not the obligation, to sell the assets specified at a fixed price or formula, on or before a specified date
B. option that gives the holder the right, but not the obligation, to buy or sell a specific futures contract at a specified price on or before the option's expiration date
C. option giving the buyer (holder) the right, but not the obligation, to buy or sell (depending on whether it is a call or a put) a bond at a certain price on or before a specified date
D. call option in which the seller (investor) owns an equivalent amount of the underlying security

Answer: call option in which the seller (investor) owns an equivalent amount of the underlying security