Question
Pioneer Limited, a gold producer, hold a short call European option with an exercise price of $500 per ounce for 100 ounces only to be
Pioneer Limited, a gold producer, hold a short call European option with an exercise price of $500 per ounce for 100 ounces only to be exercised in 6 months. The premium is $50 per ounce. If market gold price after 6 months is $400 per ounce, what would be the gain or loss assuming no time value of money.
A. "-$15,000"
B. "-$5,000"
C. "$5,000"
D. "$15,000 "
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Introduction To Derivatives And Risk Management
Authors: Don M. Chance, Robert Brooks
10th Edition
130510496X, 978-1305104969
