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[2 marks] Consider three types of European-style barrier options with barrier price X, (1) an up-and-out call option, (2) a down-and-out put option, and (3)
[2 marks] Consider three types of European-style barrier options with barrier price X, (1) an "up-and-out" call option, (2) a "down-and-out" put option, and (3) a "down-and-out" call option. The up-and-out option begins with S X and expire immediately and with zero payoff if the price S falls to X. (a) For the up-and-out call option, suppose that X E. What must be true about the price of such a barrier put option? Explain
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