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Section C (4 Mark)
Mr. XYZ is bearish about Nifty and expects it to fall. He sells a Call option with a strike price of Rs. 2600 at a premium of Rs. 154, when the current Nifty is at 2694. If the Nifty stays at 2600 or below, the Call option will not be exercised by the buyer of the Call and Mr. XYZ can retain the entire premium of Rs.154.
What would be the Net Payoff of the Strategy?
* If Nifty closes at 2900
* If Nifty closes at 2400
A. -146 and -46
B. 202 and 154
C. -46 and 4
D. -146 and 154
Answer: D

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