1. List the advantages and disadvantages of over the counter market 2. List the three different...
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1. List the advantages and disadvantages of over the counter market 2. List the three different trading styles that are normally used by option traders 3. Differentiate between in the money call option and the in the money put option 4. Differentiate between out-of-money call option and out-of-money put option Question Four: 8 marks The below table presents an American option prices for a stock as for July 6. Additional information: the stock is priced at 165.125. The expirations are July 17, August 21, and October 16. Strike July Calls August October Price 155 10.5 11.75 14 160 6 8.125 11.125 165 2.6875 5.25 8.125 170 0.8125 3.25 6 1. Compute the intrinsic value and the time value of July 160 call 2. Compute the intrinsic value and the time value of October 155 call 3. Compute the intrinsic value and the time value of July 170 call 4. Compute time to expiration (T) for July 1. List the advantages and disadvantages of over the counter market 2. List the three different trading styles that are normally used by option traders 3. Differentiate between in the money call option and the in the money put option 4. Differentiate between out-of-money call option and out-of-money put option Question Four: 8 marks The below table presents an American option prices for a stock as for July 6. Additional information: the stock is priced at 165.125. The expirations are July 17, August 21, and October 16. Strike July Calls August October Price 155 10.5 11.75 14 160 6 8.125 11.125 165 2.6875 5.25 8.125 170 0.8125 3.25 6 1. Compute the intrinsic value and the time value of July 160 call 2. Compute the intrinsic value and the time value of October 155 call 3. Compute the intrinsic value and the time value of July 170 call 4. Compute time to expiration (T) for July
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1 Advantages and Disadvantages of OverTheCounter OTC Market Advantages Flexibility OTC markets offer more flexibility in terms of contract terms pricing and negotiation compared to standardized exchan... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1305637108
6th edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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