If You Buy an Option to Buy Treasury Futures at 115,and

question 46

Multiple Choice

If you buy an option to buy Treasury futures at 115,and at expiration the market price is 110,

• A) the call will be exercised.
• B) the put will be exercised.
• C) the call will not be exercised.
• D) the put will not be exercised.

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Definitions:

Preferred Stock

A class of ownership in a corporation with a fixed dividend, receiving priority over common stock in dividend distribution and asset liquidation.

Preferred Stock

A class of stock that provides shareholders with a fixed dividend before any dividends are issued to common stockholders, often with no voting rights.

Common Stock

A type of equity ownership in a corporation, representing a claim on part of the company's profits and assets.

Dividends in Arrears

Outstanding dividend payments that have not been paid to preferred shareholders.