Question
a. Explain the five variables that affect the value of an option, and how do changes in each of these variables affect the value of
a. Explain the five variables that affect the value of an option, and how do changes in each of these variables affect the value of a call option? (5 marks)
b. Business valuation Price to earnings ratio: Using the information given in the table below, determine the price-earnings ratio for DEF Company? (10 marks)
| Earnings | $190,000 |
| Number of shares outstanding | 70,000 |
| Price per share | $25 |
| Book value per share | $15 |
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Options Futures And Other Derivatives
Authors: John C. Hull
11th Edition
013693997X, 9780136939979
