31&32 Multiple Choice

31. True or False: A put option has a strike prime of $1.00 and the futures price at expiration is $2.00, this option would be exercised. 32. The primary disadvantage for a short hedger with trading a short collar versus buying an appropriate option is: a. the short collar establishes a price ceiling b. the short collar costs more to acquire c. the short collar does not establish a price floor d. the short collar does not reduce price rlsk at all