Question
A speculator purchases a put option on treasury bond futures with a September delivery date with a strike price of 84-00. The option has a
A speculator purchases a put option on treasury bond futures with a September delivery date with a strike price of 84-00. The option has a premium of 1-00. Assume that the price of the futures contract decreases to 81-00 on the expiration date and the option is exercised at that point (if feasible). What is the net gain?
A. $1000
B. $2000
C. $3000
D. $4000
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
Money, Banking, Financial Markets & Institutions
Authors: Michael Brandl
2nd Edition
1337904821, 9781337904827
