Scipio Quiz 1 You opened the option page of Ford company in Bloomberg, and notic

Question

Scipio Quiz

1 You opened the option page of Ford company in Bloomberg, and noticed the following quotes.

One option contract allows you to trade on 100 underlying shares. If you want to buy this option contract today, you should be able to

a. buy 100 Ford shares at a price of $9.5 per share anytime between now and 10/19/18
b. buy 100 Ford shares at a price of $0.17 per share anytime between now and 10/19/18
c. sell 100 Ford shares at a price of $9.5 per share anytime between now and 10/19/18

2 Below is the trading information of butterfly strategy on fixed income securities. Assuming you are holding a long butterfly with "2yr-5yr-10yr" government securities. what is the composition of your butterfly investment?

a. buy 2-year, 5-year, and 10-year bonds proportionally.
b. buy 2-year and 10-year bonds, and sell 5-year bonds.
c. buy the 5-year bonds, and short the 2-year and 10-year bonds./18

Explanation / Answer

1.
c. sell 100 Ford shares at a price of $9.5 per share anytime between now and 10/19/18
2.
b. buy 2-year and 10-year bonds, and sell 5-year bonds.

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