Consider a European One-Year Call Futures Option and a European

question 19

Multiple Choice

Consider a European one-year call futures option and a European one-year put futures options when the futures price equals the strike price.Which of the following is true?

• A) The call futures option is worth more than the put futures option
• B) The put futures option is worth more than the call futures option
• C) The call futures option is sometimes worth more and sometimes worth less than the put futures option
• D) The call futures option is worth the same as the put futures option

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Definitions:

Inventory Purchasing

The process of acquiring goods and materials that a company intends to sell in its normal business operations.

Sporting Goods Store

A retail business specializing in the sale of sports equipment and related items for various physical activities and sports.

Lump-sum

A one-time payment executed at a specific moment, rather than several payments spread out over a period.

Installments

A method of payment where the total cost is divided into smaller, periodic payments over a set period of time.