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If You Buy a European Call Option on Canada Bonds

question 15

Multiple Choice

If you buy a European call option on Canada bonds with a strike price of 110 assuming that the premium is $0, and on the maturity date the market price of Canada bonds is 117, you will ________ the option in order to make a profit of $________.


Definitions:

Purchase Discounts

Reductions in the cost price of goods or services, offered by suppliers to buyers as an incentive for early payment.

Net Income

The amount of profit left over after all expenses, taxes, and costs have been subtracted from total revenue.

Sales

The total revenue a company generates from selling goods or services before any expenses are subtracted.

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