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

question 78

Multiple Choice

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

-Refer to CBOE.If you used the OCT 35 option to hedge rising rates,and the yield to maturity (YTM) on 13-week bills is 3.75 percent at the option's expiration,what is the outcome of your hedge?

• A) profit of $250 per contract
• B) profit of $130 per contract
• C) loss of $120 per contract
• D) no gain or loss, the option expires worthless

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Depreciation Expense

The allocation of the cost of a tangible asset over its useful life to represent the loss of value over time.

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