Question: Explain the difference between a call option and a long position in a futures contract.

Explain the difference between a call option and a long position in a futures contract.

Step by Step Solution

★★★★★

3.47 Rating (163 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Long position in future contract means the investor buy the asset to earn gain when the price of sto... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

225-B-A-I (3163).docx

120 KBs Word File

Students Have Also Explored These Related Accounting Questions!

Q:

Explain the difference between a call option on yen and a call option on yen futures.

Q:

Explain the difference between a contract that is performed illegally and an illegal contract.

Q:

What is the difference between a call option and put option? What role does an option writer play?

Q:

MODULE CODE: 44-700131-BF-2020 QUESTION 1 (6 marks) Use the following information for a bond to calculate: a) the Macaulay Duration of the bond and; b) the Modified Duration of the bond explaining...

Q:

1. What is the similarity and difference between investment and gambling. 2. Compare and contrast investment, speculation and gambling. 3. List and explain the classification of securitymarkets. 4....

Q:

1. What is the similarity and difference between investment and gambling. 2. Compare and contrast investment, speculation and gambling. 3. List and explain the classification of securitymarkets. 4....

Q:

MODULE CODE: 44-700131-BF-2020 QUESTION 3 ( 4 MARKS) (a) Explain the difference between a put option and a short position in a futures contract (b) Explain the difference between a call option and a...

Q:

Explain the difference between a call option and a long position in a futures contract. 1. A firms preferred stock often sells at yields below its bonds because a. Preferred stock generally carries a...

Q:

Explain the difference between a call option and a long position in a futures contract. L658

Q:

Explain the difference between a call option and a long position in a futures contract.

Q:

What are the advantages of the method of least squares over methods of adjustment?

Q:

(a) Find the domain of f(x) = ln (ex - 3). (b) Find f-1 and its domain.

Q:

3. Which of the following is not a characteristic of monopolistic competition? a. A large number of small firms b. A differentiated product c. Easy market entry d. A homogeneous product

Q:

What should you discontinue, and stop doing altogether, so that you can free up resources for more profitable activities?

Q:

You are a consultant to a large manufacturing corporation that is considering a project with the following net after-tax cash flows (in millions of dollars): Years from Now After-Tax Cash Flow 0...

Q:

Two investment advisers are comparing performance. One averaged a 19% rate of return and the other a 16% rate of return. However, the beta of the first investor was 1.5, whereas that of the second...

Q:

According to CAPM, the expected rate of return of a portfolio with a beta of 1.0 and an alpha of 0 is: a. Between rM and rf . b. The risk-free rate, rf. c. β( rM - rf ). d. The expected...

Q:

rect term stock the d ks can Term Bond indenture Repurchase agreement Banker's acceptance European option American option Cumulative stock Preferred stock Eurobonds Liquidity risk Default risk...

Q:

Larry has always taken his dry cleaning to Super Quick Dry Cleaning, Inc. One morning while Larry is in a hurry, he walks in the door of Super Quick, drops off his suits, and leaves without saying...

Q:

3.Is it possible for costs such as salaries or depreciation to end up as assets on the balance sheet? Explain