Practice Problem Derivatives and Alternative Investments - TopicsExpress



          

Practice Problem Derivatives and Alternative Investments Consider a call option selling for $8 in which the exercise price is $150 and the price of the underlying is $145. The value at expiration for a buyer if the price of the underlying at expiration is $153 computes to A. $3 B. $5 C. $0 Solution: A. is correct. The value at expiration for the buyer of the call computes to c_T = max(0; S_T - X) = max(0; 153 – 150) = 3.
Posted on: Wed, 15 Oct 2014 16:12:36 +0000

Trending Topics



Recently Viewed Topics




© 2015