When a Futures Call Option on a Commodity Is Exercised

question 13

Multiple Choice

When a futures call option on a commodity is exercised the option owner receives a futures contract on the commodity plus a cash payment equal to the difference between the:

• A) current options price and the current futures price.
• B) spot and forward futures prices.
• C) strike price on the option and the current futures price.
• D) exercise price and the current options price.
• E) exercise price and the strike price.

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Definitions:

Left Ear

The ear located on the left side of the head, responsible for receiving audio signals and transmitting them to the brain.

Auditory Nerve

is a cranial nerve that transmits sound information from the cochlea in the inner ear to the brain for processing and interpretation.

Inner Hair Cells

Sensory cells located in the cochlea of the inner ear, responsible for converting sound vibrations into electrical signals that are sent to the brain.

Axons

Long, slender projections of nerve cells (neurons) that transmit electrical impulses away from the neuron's cell body.