9. s=51 x=50 r=2% =3months c=2.21

The value of the put option is____________. Note: Use c-p=s-Xe^rt to find P.

a. $0.00

b. $51.00

c. $1.00

d. $0.96

e. $50.00

10. If you buy a put option (holder) for $P with strike price $X

a. You expect the value of the underlying asset to increase

b. You expect the value of the underlying asset to decrease

c. Earn a maximum payoff of X-P

d. Have a maximum loss of $P

e. b, c, and d

11. Which of the following statements is/are true?

I. Futures contain an obligation to buy/sell the underlying asset

II. Futures can have negative intrinsic value

III. Futures can have negative prices

a. I, II, and III

b. I only

c, II and III

d. I and II

e. II only

12. A standard futures contract is for 5,000 troy ounces of silver. The futures price is $23.46/oz. If the spot price is $23.61/oz,

a. The gain on the futures contract is $750 for the long side

b. The loss on the futures contract is $750 for the short side

c. The gain or loss is $0

d. Both a and b

e. Not enough information to tell