The Premium on a Pound Put Option Is

question 123

Multiple Choice

The premium on a pound put option is $.04. The spot rate and the exercise price is $1.52. The spot rate at the time of this option expiration is expected to be $1.51. The speculators could profit by:

• A) writing a put option.
• B) buying a put option.
• C) buying a call option
• D) writing a call option and buying a call option simultaneously.

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Definitions:

Chancre

A painless ulcer, particularly associated with the primary stage of syphilis, serving as an early marker of the disease.

Reproductive System

The system in humans and other organisms that works to produce offspring, including organs such as the ovaries and testes.

Urinary System

The urinary system is a group of organs responsible for producing, storing, and expelling urine; it includes the kidneys, ureters, bladder, and urethra.

Gastrointestinal System

The digestive tract and its accessory organs, responsible for the digestion and absorption of nutrients and the expulsion of waste.