The Spot Price of the Market Index Is $900

question 1

Multiple Choice

The spot price of the market index is $900.After 3 months the market index is priced at $920.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.What is the profit or loss at expiration for the long put?

• A) $2.00 gain
• B) $2.00 loss
• C) $1.95 gain
• D) $1.95 loss

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Written Message

Communication conveyed through the use of written words or text.

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