Question
Take note: There is no passage given in the assignment. Take note: No extra information was given. All the information are here Questions are all
Take note: There is no passage given in the assignment.
Take note: No extra information was given. All the information are here
Questions are all here:
Question 2
(a) An options investor made this remark: "The underlying stock of my call option has reached its highest price ever. It has appreciated over 100% in the last 6 months. I should exercise my call now. Unlike a stock, the call option has limited life. Should the stock price fall due to a technical correction, the 2 months left before the call expires is too short to see a rebound in the price. If I were to hold the stock instead, I would definitely not sell now."
(ii) Appraise the merit of the remark, assuming the stock pays a dividend. (5 marks)
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