Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

URGENT please! A.) If we are valuing options on an asset via MC simulation, and the drift term in asset prices goes higher, a put

URGENT please!

A.) If we are valuing options on an asset via MC simulation, and the "drift" term in asset prices goes higher, a put option's price on the asset will __________.

Group of answer choices

be unaffected.

go higher.

go lower.

None of the above.

B. ) If we are valuing options on an asset via MC simulation, and the "drift" term in asset prices goes higher, a call option's price on the asset will __________.

Group of answer choices

be unaffected.

go higher.

go lower.

None of the above.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Real Estate Finance

Authors: John P. Wiedemer

8th Edition

0324142900, 9780324142907

More Books

Students also viewed these Finance questions

Question

=+a) What assumptions and/or conditions are violated by this model?

Answered: 1 week ago