Let us see for ourselves how the different determinants of option pricing impact the value of an option. We will start with our two basic options and then have one variable, that affects the price of the option, change each time. All options will be solved with a one-stage binomial tree. 1. Price the above options. 2. Price the same options as in (1), when the current stock price is $110 (instead of $100 ). Explain the differences in the results. 3. Price the same options as in (1), when the strike price is $110 (instead of $100 ). Explain the differences in the results. 4. Price the same options as in (1), when the future prices are $140 and $60 (higher volatility). Explain the differences in the results. Let us see for ourselves how the different determinants of option pricing impact the value of an option. We will start with our two basic options and then have one variable, that affects the price of the option, change each time. All options will be solved with a one-stage binomial tree. 1. Price the above options. 2. Price the same options as in (1), when the current stock price is $110 (instead of $100 ). Explain the differences in the results. 3. Price the same options as in (1), when the strike price is $110 (instead of $100 ). Explain the differences in the results. 4. Price the same options as in (1), when the future prices are $140 and $60 (higher volatility). Explain the differences in the results