Suppose You Purchase the November Call Option on Orange Juice

question 31

Multiple Choice

Suppose you purchase the November call option on orange juice futures with a strike price of 150 at the price shown in the table below.What will be your profit or loss on this contract if the price of orange juice futures is $0.616 per pound at expiration of the option contract?
Futures Options
Orange juice:
15,000 lbs,U.S.cents per lb. $$\begin{array} { | r | r | r | r | r | r | r | } \hline && { \text { Calls } } & & &&{ \text { Puts } } & \\\hline & \text { Aug } & \text { Sept } & \text { Nov } & \text { Aug } & \text { Sept } & \text { Nov } \\\hline 150 & 8.85 & 10.85 & 14.05 & 0.20 & 2.25 & 5.15 \\\hline 155 & 4.75 & 7.75 & 11.45 & 1.10 & 4.35 & 7.55 \\\hline\end{array}$$

• A)loss of $2,107.50
• B)loss of $1,717.50
• C)no profit or loss
• D)profit of $1,717.50
• E)profit of $2,107.50

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