Assume an insurance company purchases a call option on a stock index futures contract for a premium of 14, with an exercise price of 1800. The value of a stock index futures contract is 250 times the index. If the stock index on the futures contract increases to 1830, what is the gain on the sale of the futures contract?
A) $15,000
B) $7,500
C) $3,300
D) $4,000
E) $1,500
Correct Answer:
Verified
Q6: The _ is the most important exchange
Q7: The _, the higher the call option
Q8: A speculator purchases a put option for
Q9: The Options Clearing Corporation (OCC)serves as a
Q10: Put options are typically used to hedge
Q12: The sale of a call option on
Q13: The greater the volatility of the underlying
Q14: When the market price of the underlying
Q15: A put option is "out of the
Q16: A speculator purchases a put option for
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents