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What Is the Cash Component of the Payoff If a Call

Question 3

Multiple Choice

What is the cash component of the payoff if a call futures option on 50 units of the underlying asset is exercised?


A) (Current Futures Price - Strike Price) times 50
B) (Strike Price - Current Futures Price) times 50
C) (Most Recent Futures Settlement Price - Strike Price) times 50
D) (Strike Price - Most Recent Futures Settlement Price) times 50

Correct Answer:

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