The Profits on a Derivatives Position Are Fixed When a Bond's

question 3

Multiple Choice

The profits on a derivatives position are fixed when a bond's price falls below a certain point,but above that point the profits fall when the bond price rises. This profit profile fits which of the following positions?

• A)Purchased call option
• B)Written call option
• C)Purchased put option
• D)Written put option
• E)None of the options are correct.