Consider a digital call option, i.e., one that pays a dollar if at maturity the stock price
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Consider a digital call option, i.e., one that pays a dollar if at maturity the stock price ST is greater than the strike K.
(a) What is the sign of the delta of this option?
(b) When will the delta of this option be the highest?
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a As with any call for a digital call also it is the case that higher stock pric...View the full answer
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