Homework answers / question archive / Curtin University - FINANCE INVE3000 An investor buys a put option on a futures contract

Curtin University - FINANCE INVE3000 An investor buys a put option on a futures contract

Finance

Share With

Curtin University - FINANCE INVE3000

An investor buys a put option on a futures contract. Which answer is true?

1. 1. The investor takes a long position in the futures if he/she exercises the put option.
   2. The investor takes a short position in the future if he/she exercises the put option.
   3. The  investor  takes  a  short  position  in  the  futures  if  he/she  does  not exercise the put option.
   4. The  investor  can  choose  whether  to  go  long  or  short  when  he/she exercises the put option.
   5. None of the above