Question
1.Assume an option trader bought 10 August 15 puts on Citigroup, Inc. (C) for a total cost of$850. If the position was held to expiration
1.Assume an option trader bought 10 August 15 puts on Citigroup, Inc. (C) for a total cost of$850. If the position was held to expiration at which point the stock closed at 16, calculate the dollar amount of profit or loss on the trade before commissions and taxes.
A. $1600 |
D. $0 |
B. $580 |
C. -$850 |
2.
One CBOT corn futures contract trades in units of 5,000 bushels and the minimum initial margin is $2,500 per contract. On July 17, 2013, the Sep '13 CBOT corn futures contract settled at $6.50 per bushel. Calculate the amount of leverage inherent in the futures contract using the minimum initial margin.
D. 15 |
B. 13 |
C.14 |
A. 12
3. Holding all else equal, an unexpected fall in interest rates will cause the value of a given outstanding call option to __________.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started