The Price of a December Put Futures Option Is Quoted

question 5

Multiple Choice

The price of a December put futures option is quoted as 5-52. Each Treasury bond futures contract is for delivery of $100,000 in Treasury bonds. What is the cost of one contract?

• A) $5,520.00
• B) $5,812.50
• C) $6,625.00
• D) $8,250.00

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Definitions:

Balance Sheet

A financial statement that presents a company's assets, liabilities, and shareholders' equity at a particular point in time, offering a snapshot of its financial condition.

Future Expenses

Anticipated costs or financial obligations a company expects to incur in the future.

Note Payable

A written promise to pay a specific sum of money at a future date, typically including interest payments.

Promissory Note

A financial instrument in which one party (the issuer) promises in writing to pay a determinate sum of money to the other (the payee), either at a fixed or determinable future time or on demand of the payee, under specific terms.