Assume you have an option that pays 1 if the stock price equals or above 10 and

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Assume you have an option that pays 1 if the stock price equals or above 10 and 0 otherwise. If the current stock price is 7 and the movements are to 14 and 3.5 what is the value of this option assuming expiry in 1 year and interest rate of 5%?

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Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Jan 02, 2024 11:50 PM

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Assume you have an option that pays 1 if the stock price equals or above 10 and

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It seems like youre referring to a binary option specifically a cashornothing option where the payou... View the full answer

Income Tax Fundamentals 2013

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