Question
Barry Jones has been asked by his university tutor to prepare cheat sheet for use in the final exam. Contained below is a list of
Barry Jones has been asked by his university tutor to prepare cheat sheet for use in the final exam.
Contained below is a list of possible movements in factors that effect option pricing.
Using a to represent an increase in the value of the option and to represent a decrease in the value of an option all else being equal.
Call Option Value
Put Option Value
An increase in the current spot currency price.
Call Option Value
Answer
Put Option Value
Answer
A decrease in the exercise price of the option.
Call Option Value
Answer
Put Option Value
Answer
An increase in market volatility
Call Option Value
Answer
Put Option Value
Answer
An American option as opposed to a European option all other things being equal.
Call Option Value
Answer
Put Option Value
Answer
A decrease in the risk-free rate
Call Option Value
Answer
Put Option Value
Answer
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Financial Markets and Institutions
Authors: Jeff Madura
12th edition
9781337515535, 1337099740, 1337515531, 978-1337099745
