What Is the Cash Settlement If a Put Futures Option

question 15

Multiple Choice

What is the cash settlement if a put futures option on 50 units of the underlying asset is exercised?

• A) (Current Futures Price - Strike Price) times 50
• B) (Strike Price - Current Futures Price) times 50
• C) (Most Recent Futures Settlement Price - Strike Price) times 50
• D) (Strike Price - Most Recent Futures Settlement Price) times 50

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Definitions:

Fiat Money

Money without intrinsic value that is used as money by government decree

Money

The set of assets in an economy that people regularly use to buy goods and services from other people.

Wealth

The accumulation of valuable economic resources and assets, including property, investments, and cash, that an individual or entity possesses.

Roundabout Trade

Trade involving multiple countries where goods are exported to one country before being re-exported to the final destination.