Table 19-12
Production and
Consumption Production
Without Trade with Trade

question 152

Multiple Choice

Table 19-12
Production and
Consumption Production
Without Trade With Trade
$$\begin{array} { | l | l | l | l | l | l | } \hline & \text { Swards } & \text { Beltr } & & \text { Svards } & \text { Beltr } \\\hline \text { Estoria } & 100 & 50 && 200 & 0 \\\hline \text { Morocco } & 50 & 40 && 0 & 120 \\\hline\end{array}$$
Estonia and Morocco can produce both swords and belts.Table 19-12 shows the production and consumption quantities without trade, and the production numbers with trade.
-Refer to Table 19-12.With trade,what is the total gain in sword production?

• A)50
• B)100
• C)200
• D)350

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Definitions:

Call Option Price

The price at which the holder of a call option has the right, but not the obligation, to buy an underlying security before the option expires.

Option Maturity

The date on which an option contract expires, after which it can no longer be exercised.

Lower Bound

The minimum value that a financial instrument, such as an option, can decrease to, taking into account current market conditions.

Buy Puts

An investment strategy that involves purchasing put options, contracts that give the buyer the right, but not the obligation, to sell a security at a specified price before the contract expires.