Assume you pay a premium of $0.80/bu for a put option with a strike price of $6.00/bu and that the current futures price is $5.50/bu. Then, the option is in-the-money by:
A. $0.00/bu since there is no intrinsic value in this put option
B. $0.30/bu
C. $0.50/bu
D. $0.80/bu
Ans: C. $0.50/bu
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The drawback to calculating real GDP using base-year prices is that
A) real GDP in one year is not comparable to real GDP in another year. B) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP. C) relative prices change over time and these changes are reflected in base-year prices. D) quality changes are reflected in base-year prices.
According to the Herfindahl-Hirschman Index, which is the more concentrated industry?
A. Industry X with an index of 2,400.
B. Industry Y with an index of 2,738.
C. Both industries have the same indices.
D. There is no way to determine the Herfindahl Indices of these industries with this data.