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Compute the net gain or loss from the derivative contract

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Reference no: EM133075720

Question - Topic - Financial Risk Management - ABC Corporation acquired a call option for 5,000 pieces of P1,000-face value bonds of XYZ Corp. at a strike price of P990 on a later date. ABC paid a premium of P47,000. On the exercise day of the option, the bonds were selling at 98. Compute the net gain or (loss) from the derivative contract.

Reference no: EM133075720

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