Raoul Purchased Both a Call and a Put on 125,000

question 143

Multiple Choice

Raoul purchased both a call and a put on 125,000 bushels of soybeans. Both options have a strike price of 510 and a common expiration date. Soybean contracts are based on 5,000 bushels. The
Price of soybeans on the expiration date is 530. Ignore the costs of the options and all transaction
Costs. What is Raoul's profit or loss on these two option contracts?

• A) -$25,000
• B) -$12,500
• C) $0
• D) $12,500
• E) $25,000

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Definitions:

Vietnam Movies

Films that are related to, depict, or are set during the Vietnam War era.

Proliferation

The rapid increase or spread of something, often used in contexts such as the proliferation of digital technology or weapons.

Vietnam Syndrome

A term used to describe the reluctance of the United States to engage in overseas military interventions after the negative experiences and public opposition during the Vietnam War.

Consumer Ideology

The set of beliefs and values that underpins consumer behaviors and the significance of consumption in society.