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QUESTION6 Imagine that Google has a probability of 80% to increase by 10 % and a probability of 20% to fall by 10 % over
QUESTION6 Imagine that Google has a probability of 80% to increase by 10 % and a probability of 20% to fall by 10 % over the next month. Apple, on the other hand, has a probability of 20% to increase by 10% and a probability of 80% to fall by 10 %. Apple Call will be more expansive than Google Call Google Call will be equally expansive than Apple Call OGoogle Call will be more expansive than Apple Call O For strike below the current spot: Google Call will be equally expansive than Apple Call QUESTION 7 Imagine that Google has a probability of 80% to increase by 10 % and a probability of 20% to fall by 10 % over the next month, Apple, on the other hand, has a probability of 20% to increase by 20% and a probability of 80% to fall by 20 %. Compare the price of Call option on Google and Apple, both with the same strike and expiry in one month. O Apple Call will be more expansive than Google Call OGoogle Call will be equally expansive than Apple Call Google Call will be more expansive than Apple Call For strike below the current spot: Google Call will be equally expansive than Apple Call
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