The spot price of the market index is $900. The annual rate of interest on treasuries is 2.4% (0.2% per month). After 3 months the market index is priced at $920. An investor has a long call option on the index at a strike price of $930
What profit or loss will the writer of the call option earn if the option premium is $2.00?
A) $2.00 gain
B) $2.00 loss
C) $2.01 gain
D) $2.01 loss
C
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Using financial leverage is a good financial strategy from the viewpoint of stockholders of companies having:
a. a high debt ratio. b. cyclical highs and lows. c. steady or rising profits. d. a steadily declining current ratio. e. none of the answers are correct.
Managers practicing __________ view the cost of compliance as a(n) __________
a. value-based compliance management, investment rather than an expense b. strategic compliance management, investment rather than an expense c. resource-based management, expense rather than an investment d. strategic-based risk management, investment rather than an expense
Under the Madrid Protocol, a company can register its trademark in more than one country with a single application
Indicate whether the statement is true or false
Modigliani and Miller's first article led to the conclusion that capital structure is "irrelevant" because it has no effect on a firm's value.
Answer the following statement true (T) or false (F)