MtM value of the contract when Brent Crude is trading at USD 108? (Disregard the impact of compounding)
A. USD -2.50
B. USD -7.50
C. USD 2.50
D. USD 7.50
Answer:A
MtM value of the contract when Brent Crude is trading at USD 108? (Disregard the impact of compounding)
A. USD -2.50 B. USD -7.50 C. USD 2.50 D. USD 7.50
Explanation: This option contract is a short call position so the profit is: Max (St-K,0) +P or USD 108 + USD 103