Vince, a Speculator, Expects Interest Rates to Increase and Purchases

question 23

Multiple Choice

Vince, a speculator, expects interest rates to increase and purchases a put option on Treasury bond futures with an exercise price of 95-32. The premium paid for the put option is 2-36. Just prior to the expiration date, the price of the Treasury bond futures contract is valued at 93-22. Vince exercises the option and closes out the position by purchasing an identical futures contract. Vince's net gain from this speculative strategy is $____.

• A)- 406.25
• B)4,718.75
• C)- 4,718.75
• D)- 812.50
• E)None of these are correct.

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a muscle that is connected at either or both extremities with a bone and so move parts of the skeleton; characterized by striated fibers.

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The part of the nervous system that consists of the brain and spinal cord, responsible for processing and sending out neural signals.

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A branch of medicine that aims to enhance and restore functional ability and quality of life to those with physical impairments or disabilities.

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