The Premium on a Call Option on the Market Index

question 9

Multiple Choice

The premium on a call option on the market index with an exercise price of 1050 is $9.30 when originally purchased.After 2 months the position is closed,and the index spot price is 1072.If interest rates are 0.5% per month,what is the Call Profit?

• A) $9.30
• B) $9.39
• C) $12.61
• D) $22.00

---

Definitions:

Linkage

The process or fact of linking or being linked, often used in genetics, computing, or social sciences to describe connections or associations between entities.

Movies

Motion pictures or films that serve as a medium of entertainment, education, or communication.

Associating

The process of linking or connecting ideas, objects, or symbols with one another in one's mind.

Hurricane Katrina

A devastating Category 5 storm that struck the Gulf Coast of the United States in August 2005, causing widespread destruction and loss of life.