You would like to practice your knowledge of investment and quantitative methods for finance that you learnt
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Question:
You would like to practice your knowledge of investment and quantitative methods for finance that you learnt at Amity, so you found two call options A and B, both options sell in the market for $14, for an underlying stock which currently sells at $40. Both options mature in six months, and the risk free rate is 10% and a variance of 9%. Upon maturity, you can exercise option A for $30, and option B for $50.
Which option you choose to buy? Explain your answer.
Related Book For
Financial and Managerial Accounting
ISBN: 978-0132497978
3rd Edition
Authors: Horngren, Harrison, Oliver
Posted Date: