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Greeley [361]
3 years ago
5

What is the gain or loss from purchasing a put option on $100,000 face value Treasury bonds with a strike price of $90,000 (90 p

oints) and a premium of 1.5 points ($1,500) with an expiration date at the end of July if the end-of-July selling price for the bonds is $80,000.
Business
1 answer:
Klio2033 [76]3 years ago
7 0

Answer:

Profit of $8,500

Explanation:

Strike Price = $90,000

Premium = $1,500

Break even point = Strike price - Premium

Break even point = $90,000 - $150

Break even point = $88500

Profit = Break even point - Share price

Profit = $88,500 - $80,000

Profit = $8,500

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