A Synthetic Put Option on Futures Could Be Constructed by Buying

question 14

True/False

A synthetic put option on futures could be constructed by buying a call option on futures and selling the futures.

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Definitions:

Lump-sum Price

This is a total amount agreed upon for a contract that is not itemized or broken down into individual costs or charges.

Relative Market Values

The comparison of an item’s market price to other similar items in the relevant market.

Depreciation Expense

The portion of the cost of a fixed asset that is considered as an expense due to its use, wear, and tear over time.

Estimated Useful Life

The length of time, usually expressed in years or periods, that an asset is expected to be used in business operations.