Consider the following up-and-in 60-strike European call options on the same underlying stock with the same time to expiration:

The current price of the stock is 50.

Rank the four barrier options, from highest to lowest price.

(A) I ≥ II ≥ III ≥ IV

(B) IV ≥ III ≥ II ≥ I

(C) I = II ≥ III ≥ IV

(D) IV ≥ III ≥ II = I

(E) The correct answer is not given by (A), (B), (C), or (D)  

Transcribed Image Text:

Option Barrier I II III IV 55 60 65 70