1. Which has the lowest profit potential (measured as a percent of the initial investment) assuming the price of the underlying rises substantially after the position is taken?
A Long put
B Long call
C Covered call
D Long underlying
2. A decrease in the volatility of prices of the underlying asset will:
A increase both put and call option premiums on the underlying asset.
B decrease both put and call option premiums on the underlying asset.
C increase put option premiums and decrease call option premiums on the underlying asset.
D decrease put option premiums and increase call option premiums on the underlying asset.