Consider a "C$ Dec 6000 Call" Selling on the Chicago

question 11

Multiple Choice

Consider a "C$ Dec 6000 call" selling on the Chicago Mercantile Exchange (CME) at a price of $0.0180/C$. Each CME C$ contract is worth C$125,000. What would be the profit on an investment in this option if the spot rate at expiration is $0.5930/C$?

• A) -$2,250
• B) $0
• C) $1,750
• D) $2,250
• E) $4,000

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Definitions:

Penicillin

A group of antibiotics derived from Penicillium fungi, used for treating bacterial infections.

Privatization

The process of transferring ownership of a business, enterprise, agency, or public service from the government to private individuals or organizations.

Government

The governing body of a nation, state, or community, responsible for making and enforcing laws, policies and for regulating public affairs.

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.