if you buy an option to buy Canada futures at 110, and at expiration the market price is 115, ________.
A) the call will be exercised
B) the put will be exercised
C) the call will not be exercised
D) the put will not be exercised

Question

Quizplus · Accepted Answer

The call option gives the buyer the right to buy the underlying asset (Canada futures) at the strike price (110) on or before the expiration date. Since the market price is higher than the strike price at expiration (115>110), it would be profitable for the buyer to exercise the call option and purchase the asset at the lower strike price. Therefore, the call option will be exercised.

If You Buy an Option to Buy Canada Futures at 110