Chapter 04 · Section 4.1

Cash Settlement

Which of the following futures and option contracts must necessarily be cash settled?

• a) Interest rate futures options.
  No. Not a futures option. If a futures option is exercised, a long or short futures position is delivered. So there is no cash settlement as far a the option is concerned.
  b) Interest rate options.
  c) Stock index options.
  d) Consumer price index futures.
  e) Stock options.
  f) c and d

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