Use the following information for questions 9 and 10 below. You may assume (for simplicity) that both put and call option contracts for gold are for a quantity of one ounce of gold. Both the put and call options have the same maturity. The premium for the call is $2/ounce and the premium for the put is $1/ounce. Both options have a strike price of $1100/ounce. An investor writes (or sells) one put option contract. If the price of gold in the spot market at the maturity date of the option is $1095, what is her profit/loss?

Answer rating: 100% (QA)

To calculate the profit or loss for the investor who wrote sold one put optio... View the full answer