Question 1

Which of the following statements accurately describes the features of the option illustrated in the diagram below?

Group of answer choices

More than one of the other statements accurately describes features of this option.

The holder of this option will only make a profit if the price of the asset at expiry is less than $10.

At expiry, the holder of this option would be better off exercising the option rather than allowing it to lapse only for asset values less than $10.

Prior to expiry, the total value of this option is zero if the price of the asset is equal to $11.

None of the other statements accurately describes features of this option.

Question 2

Judy had three option positions which she held until the expiration date. The first position was 5 short calls in corn options, where the exercise price was $8.0 and the option price when it was bought or sold by Judy was $0.6 per option. The market price of corn at expiration was $9.61. The second position was 6 long calls in wheat options, where the exercise price was $9.5 and the option price when it was bought or sold by Judy was $0.6 per option. The market price of wheat at expiration was $9.51. The third position was 4 short puts in soybean options, where the exercise price was $10.0 and the option price when it was bought or sold by Judy was $0.6 per option. The market price of soybeans at expiration was $11.97. Which of the following values is closest to Judy's combined profits from the three option positions?

Group of answer choices

None of the other answers.

$-4.15

$-6.19

$-8.23

$-2.11