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Miss Liza, the CFO of Nice Biscuit Berhad ( NBB ) believes that all corporate securities have implicit or explicit option features and as a
Miss Liza, the CFO of Nice Biscuit Berhad NBB believes that all corporate securities have
implicit or explicit option features and as a result, understanding securities that possess
option features requires knowledge of the factors that determine an option's value. Miss
Liza is also aware that the most familiar options are stock options.
On June Miss Liza buys call options on units of Petronas Dagangan
Berhad PDB shares with an exercise price of RM per unit. The value of the options is
RM per unit and the termination date is on June
On June n the share price of PDB share is RM
From the above information you are required to compute Miss Liza's gain or losses.
Based on your computation, explain to Miss Liza about this situation.
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