This investment ignoring transaction costs

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1. Farmer's Insurance Group has decided to sell an S&P 500 index futures contract with an index price of 1850. When the position was closed out, the index price was 1790. Determine Farmer's profit or loss on this investment ignoring transaction costs.

gain of $15,000

loss of $15,000

gain of $35,000

loss of $35,000

2. Henry purchased a call option with an exercise price of $45 for a premium of $5.  Before the option expired, the stock price rose to $52 and Henry exercised his option. What was the return (not annualized) to Henry?

75.0 percent

35.0 percent

50.0 percent

25.0 percent

Reference no: EM131905315

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