With regard to futures options, how much profit would an investor make if she bought a call

Question:

With regard to futures options, how much profit would an investor make if she bought a call option on gold at 7.20 when gold was trading at $482 an ounce, given that the price of gold went up to $525 an ounce by the expiration date on the call?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

See More Books

Question Posted: Apr 28, 2015 03:55 AM

See More Questions

A bank has written European a call option on one stock and a European put option on another stock. For the first option, the stock price is 50, the strike price is 51, the volatility is 28% per...
A bank has written a call option on one stock and a put option on another stock. For the first option the stock price is 50, the strike price is 51, the volatility is 28% per annum, and the time to...
A stock price is currently $100. A call option on this stock with a strike price of $100 and one year to maturity costs $13.61. The continuous-time interest rate is 5%. By using a one-step binomial...
1. Dependence of business on environment (Define) 2. Business and environment ethics (Define) 3. Ethical behaviour includes 1) 2) 3) Business and Ecological (environmental ethics)
Why do MNEs sometimes have to modify their personal selling strategies when marketing their goods in international markets?
Based on the shape of this distribution, what measures of center and spread would be most appropriate to report? (a) The mean and standard deviation (b) The mean and the interquartile range (c) The...
Event B: rolling an odd number and the spinner landing on green
Mountain Sports Inc. borrowed money for two years last week at 12%. The pure rate is 2%, and Mountains financial condition warrants a default risk premium of 3% and a liquidity risk premium of 2%....
High-Low Method The manufacturing costs of Rosenthal Industries for the first three months of the year follow: Total Costs Production January $129,600 1,200 units February 145,730 2,300 March 201,600...
Starfax, Inc., manufactures a small part that is widely used in various electronic products such as home computers. Results for the first three years of operations were as follows (absorption costing...
An American currency speculator feels strongly that the value of the Canadian dollar is going to fall relative to the U.S. dollar over the short run. If he wants to profit from these expectations,...
You just heard a news story about mad cow disease in a neighboring country, and you believe that feeder cattle prices will rise dramatically in the next few months as buyers of cattle shift to U.S....
Sparkle Soda spends $ 1 on direct materials, direct labor, and variable manufacturing overhead for every unit (12- pack of soda) it produces. Fixed manufacturing overhead costs $ 3 million per year....
Everyone at some point has had issues with time management and procrastination in their work life, academic life and social life. How have you been handling time management issues in your life? Have...
You want to make three peanut butter and jelly sandwiches. What is the best way to make them that's consistent with an agile mindset? Create a sandwich assembly line, applying all the peanut butter...
1 pts Joan Reed exchanges commercial real estate that she owns for other commercial real estate, plus $50,000 cash. The following additional information pertains to this transaction: Property given...
It is believed that 86% of Padres fans would have liked Trevor Hoffman to remain in San Diego to finish out his career as a San Diego Padre. You would like to simulate asking 10 Padres fans their...
The videos below cover why American higher education, including public colleges and universities, is so expensive. They also explore factors that have resulted in the current student loan debt...
Forty randomly selected students were asked the number of pairs of sneakers they owned. Let X = the number of pairs of sneakers owned. The results are as follows: a. Find the sample mean X b. Find...
Show, if u(x, y) and v(x, y) are harmonic functions, that u + v must be a harmonic function but that uv need not be a harmonic function. Is e"e" a harmonic function?
Determine the equilibrium price on an equity warrant. To search for warrants, go to the SECF screen. On the screen, click "Equities" from the "Category" dropdown, click the "Warrants" tab, and select...
Why does management accounting information need to be timely?
Is management accounting information primarily historical or future oriented? How does that compare with financial accounting information?
How does accounting information assist management in measuring efficiency and effectiveness?
thumbs up if correct A stock paying no dividends is priced at $154. Over the next 3-months you expect the stock torpeither be up 10% or down 10%. The risk-free rate is 1% per annum compounded...
Question 17 2 pts Activities between affiliated entities, such as a company and its management, must be disclosed in the financial statements of a corporation as O significant relationships O segment...
Marchetti Company, a U.S.-based importer of wines and spirits, placed an order with a French supplier for 1,000 cases of wine at a price of 200 euros per case. The total purchase price is 200,000...

With regard to futures options, how much profit would an investor make if she bought a call

Question:

Step by Step Answer:

The purchase price of the gold call option would be 720 x 100 720 The value of th...View the full answer

Fundamentals of Investing

Related Video

Students also viewed these Banking questions