Chapter 06 · Section 6.1

Potential Losses

Your potential losses are:

a) limited on the upside and unlimited on the downside.
• b) limited on the downside and unlimited on the upside.
  Yes. On the downside, the premium paid for the long option is offset by the premiums received for the short options. Continue
  c) unlimited on both the upside and the downside.
  d) limited on both the upside and downside.