Suppose you buy an asset at $50 and sell a futures contract at $53. Ignoring cost of carry, what is your profit at expiration if the asset price goes to $49?

a.

$1

b.

$3

c.

$4

d.

$4

Clear my choice

If the current stock price of Tencent is $500, which of the following options has the cheapest premium?

a.

One-month $480 put with 38% volatility

b.

One-month $480 call with 38% volatility

c.

Two-month $500 call with 40% volatility

d.

B. Two-month $500 put with 40% volatility