The Spot Price of the Market Index Is $900

question 10

Multiple Choice

The spot price of the market index is $900.After 3 months the market index is priced at $915.The annual rate of interest on treasuries is 2.4% (0.2% per month) .The premium on the long put,with an exercise price of $930,is $8.00.Calculate the profit or loss to the short put position if the final index price is $915.

• A) $15.00 gain
• B) $15.00 loss
• C) $6.95 gain
• D) $6.95 loss

---

Definitions:

Delegator

A person or entity that assigns responsibility and authority to another, known as the delegatee, to carry out specific activities.

Performance

The act of fulfilling the requirements as stipulated in a contract or agreement.

Obligor

An individual or entity that is legally bound to fulfill an obligation, such as making a payment or performing a service, under a contract.

Notice

Formal information or warning given to a person or public about an event, decision, or action.