If,for a $1000 Premium,you Buy a $100,000 Call Option on Bond

question 35

Multiple Choice

If,for a $1000 premium,you buy a $100,000 call option on bond futures with a strike price of 114,and at the expiration date the price is 110,your ________ is ________.

• A)profit;$1000
• B)loss;$1000
• C)profit;$3000
• D)loss;$3000

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Definitions:

Lenders

Individuals or institutions that provide funds to borrowers under the expectation of being repaid with interest.

Borrowers

Borrowers are individuals or entities that take loans from lenders, with the promise of repaying the loan amount along with interest after a specified duration.

Closed Economy

An economic system that does not interact with other economies in terms of trade, investment, or migration and relies solely on its own resources and internal production.

Variable Y

A symbolic representation of a dependent variable that is subject to change based on other variables' values within a mathematical function or an experiment.