A Payoff Structure Resembling That of a Short Futures Position

question 23

Multiple Choice

A payoff structure resembling that of a short futures position can be created by:

• A)buying a call option and selling a put option,with the same exercise price and premium for both options.
• B)selling a call option and buying a put option,with the same exercise price and premium for both options.
• C)buying a call option and buying a put option,with the same exercise price and premium for both options.
• D)selling a call option and selling a put option,with the same exercise price and premium for both options.

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Definitions:

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The phenomenon or event that an explanation seeks to explain.

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A statement or account that makes something clear by describing the relevant structure, mechanisms, or reasons.

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