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If,for a $1000 Premium,you Buy a $100,000 Call Option on Bond

question 87

Multiple Choice

If,for a $1000 premium,you buy a $100,000 call option on bond futures with a strike price of 110,and at the expiration date the price is 114,your ________ is ________.


Definitions:

Sunk Costs

Expenses that have already been incurred and cannot be recovered or refunded.

Capital Investment

Funds invested in a business or enterprise with the intention of furthering its business objectives.

Capital Budgeting

The process of evaluating and selecting long-term investments compatible with the firm's goal of wealth maximization.

NPV

Short for Net Present Value, which is a financial metric used to evaluate the profitability of an investment or project, considering the time value of money.

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