A dealer writes a March put option with a strike price of $30. The price of the option is $4. Under what circumstances does the dealer make a profit of $4?
Select one:
a.
The dealer makes a profit of $4 if the price of the stock is below $26 at the time of exercise.
b.
The dealer makes a profit of $4 if the price of the stock is above $30 at the time of exercise.
c.
The dealer makes a profit of $4 if the price of the stock is below $30 at the time of exercise.
d.
The dealer makes a profit of $4 if the price of the stock is above $26 at the time of exercise.
A trader enters into a short greasy wool futures contract when the futures price is $11.70 per kg. The contract is for the delivery of 2,000 kgs clean weight. How much does the trader gain or lose if the greasy wool at the end of the contract is $11.50 per kg?
Select one:
a.
The trader gain $ 40.
b.
The trader loss $ 400.
c.
The trader gain $ 400.
d.
The trader loss $ 40.
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