1. Mitch sold 10 futures contracts on copper at a price of $0.8104 per pound. Contracts on copper are set at 25,000 pounds. What is the amount of Mitch's profit or loss if the price on the maturity date is $0.8063?

1. -$102.50
2. -$410.00
3. $1,025.00
4. -$1,025.00
5. $102.50

2. You sold a May American put option on Netscape stock with an exercise price of $165. Which of the following statements is true?

1. You have the right to sell Netscape shares for $165 at any time prior to the option expiration in May, regardless of the stock's market price.
2. You are obligated to sell Netscape shares at $165 when the option expires in May, regardless of the stock's market price.
3. You are obligated to buy Netscape shares at $165 when the option expires in May, regardless of the stock's market price.
4. You have the right to buy Netscape shares for $165 at any time prior to the option expiration in May, regardless of the stock's market price.
5. You are obligated to buy Netscape shares for $165 at any time prior to the option expiration in May, if the owner of the option chooses to exercise.