A standard lookback call option on stock has a value at maturity equal to (Value of the stock at maturity Minimum value of stock during the life of the option prior to maturity) or $0, whichever is greater If the minimum value reached prior to maturity was $20 11 and the value of the stock at maturity is $23, for example, the call is worth $23 $20 11 $2 89 Briefly discuss how you might use Monte Carlo simulation in valuing a lookback call option

Question: A standard lookback call option on stock has a value at maturity equal to (Value of the stock at maturity - Minimum value of stock

A standard lookback call option on stock has a value at equal to (Value of the stock at - Minimum value of stock during the life of the option prior to or $0, whichever is greater. If the minimum value reached prior to was $20.11 and the value of the stock at is $23, for example, the call is worth $23 − $20.11 = $2.89. Briefly discuss how you might use in valuing a lookback call option?

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