Suppose that on 2-March Jeweler Inc. buys a European options contract to buy 100 ounces of gold from Gold Inc on 30-April at price $4212/ounce. The price of the option is 3$/ounce of gold. If price of the gold on 30-April is 4231$/ounce, what will total payoff for Gold Inc. at maturity?

Answer rating: 100% (QA)

To calculate the total payoff for Gold Inc at maturity we need to consider two cases A If the ... View the full answer