Refer to the previous exercise. Determine Jason's profits (for both prices on expiration date) if instead of
Question:
Refer to the previous exercise. Determine Jason's profits (for both prices on expiration date) if instead of buying a put option on a futures contract he sold a $100,000 Treasury bonds futures contract at par.
Data From previous exercise
Jason bought a put option on a $100,000 Treasury bond futures contract with an exercise price of 105 for a premium of $2,000. If on expiration the futures contract sells for 110, determine Jason's profits and explain if he will exercise the right to sell the futures contract. How would your answer change if the futures contract sells for 95 on expiration?
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Step by Step Answer:
If Jason sold a 100000 Treasury bonds futures contract at par he would have a profit of 5000 if the futures contract sells for 110 on expiration and a ...View the full answer
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Related Book For 
Financial Markets And Institutions
ISBN: 9781292215006
9th Global Edition
Authors: Stanley Eakins Frederic Mishkin
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