Question
You bought a binary option with a $1000 pay off if the price of AIG in 3 is greater than $60 in six months. The
You bought a binary option with a $1000 pay off if the price of AIG in 3 is greater than $60 in six months. The risk-free rate is 3%. What is the value of the option? What is the real-world probability of a payoff?
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Fundamentals Of Financial Management
Authors: Richard Bulliet, Eugene F Brigham, Brigham/ Houston
11th Edition
1111795207, 9781111795207
