Suppose a Financial Manager Buys Call Options on 45,000 Barrels

question 59

Multiple Choice

Suppose a financial manager buys call options on 45,000 barrels of oil with an exercise price of $31 per barrel.She simultaneously sells a put option on 45,000 barrels of oil with the same exercise price of $31 per barrel.Her net profit per barrel is _____ if the price per barrel is $29 and _____ if the price per barrel is $35.

• A)-$4; $2
• B)-$2; $0
• C)$0; -$2
• D)$0; $2
• E)-$2; $4

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Definitions:

Postoperative Pain

Pain experienced by patients after undergoing surgical procedures.

Recognize

To identify someone or something seen, known, or experienced before.

Top-down Processing

A cognitive process that starts with the brain applying what it knows to interpret sensory information, rather than starting with the sensory input itself.

Sensory Input

The information received by sensory receptors about the internal and external environment.