Using the Data for the Problem, Assume That You Entered

question 39

Multiple Choice

Using the data for the problem, assume that you entered into an option with Goldman Sachs for one contract worth £75,000 at a premium of $.0325, a strike price of 162 and a brokerage fee of $25 to get into the option and also to exercise the option. Would you exercise the option?

• A) yes
• B) no
• C) It depends on the June 1 spot rate.
• D) This is not an appropriate situation for an option.

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Definitions:

Peripheral Nervous System

The part of the nervous system that consists of the nerves and ganglia outside of the brain and spinal cord.

Glands

Organs in the body that secrete hormones or other substances directly into the blood or onto a body surface.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the medulla oblongata in the brainstem to the lumbar region of the vertebral column, transmitting neural signals between the brain and the rest of the body.

Reflexes

Automatic, involuntary responses to specific stimuli, such as the knee-jerk reaction, that are mediated by the nervous system.