The share price of Heavy Metal ( HM ) changes only once a month: Either it goes
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Question:
The share price of Heavy Metal HM changes only once a month:
Either it goes up by or it falls by Its price now is $ The interest rate is per month.
What is the value of a onemonth call option with an exercise price of $
What is the option delta?
The payoffs of the call option can be replicated by buying shares of stock and borrowing. What amount should be invested in stock and what amount must be borrowed?
What is the value of a twomonth call option with an exercise price of $
What is the option delta of the twomonth call over the first onemonth period?
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