A Payoff Structure Resembling That of a Long Futures Position

question 11

Multiple Choice

A payoff structure resembling that of a long 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:

Business

The practice of making one's living by engaging in commerce, trade, or services.

Personal

Relating to or affecting a particular person rather than anyone else.

Indemnification

Indemnification refers to the obligation of one party to compensate another for losses or damages incurred, as specified in a contractual agreement.

Corporate Directors

Members of a corporation's board tasked with making key business decisions and overseeing the organization's management.