EXERCISE 1.4.8. We measure the underlying price, strike price and option price in dollars (the strike is measured in "future dollars"), but one can also plausibly measure in cents and all prices would be multiplied by 100. Or we can measure prices in dimes (10-cent or 0.1 dollar coins). and all values would be multiplied by 10. Or in quarters (0.25 of a dollar) and the factor would be 4. This justifies the following law, (1.4.4) CaSE, T) = 0C (S, ET), for any a > 0. Differentiate this equation with respect to o at a = 1 to derive the formula ac ac (1.4.5) as S DE 1