Use the Following Information on 13-Week T-Bill Rate Options to Answer

question 50

Multiple Choice

Use the following information on 13-week T-bill rate options to answer the following question(s) .

-Refer to CBOE.Suppose you want to construct a collar to reduce the cost of the cap by selling a floor.What is the net cost of the least expensive such collar? (Be sure the strike prices on the call and the put are NOT the same!)

• A) $0.10 per contract outflow
• B) $10 per contract outflow
• C) $0.10 per contract inflow
• D) $10 per contract inflow

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