1/(1 + r)t  is the formula for:   Question 22 options:   The compounding factor   The risk-free interest rate   Present value   The discount factor

What is the Delta of an at-the-money binary option with a payoff 0 at < $100, and payoff 1 at ≥ $100, as it approaches expiry?

Consider the 1-period binomial model with a bond with A(0) = 60 and A(1) = 70 and a stock with S(0) = 4X and S^u(1) 6Y and S^d(1) = 3Z. = 1. What is the price (payoff) C(1) of a call option with strike price 28? 2. same... with strike price 45? 3. same... with strike price 72? 4. Set up a system of linear equations to determine a replicating portfolio for the call option from part 2 (strike price 45). 5. Solve it and determine the price C(O). 6. Compute, tabulate, and plot the price C(O) as you vary the strike price of the option from 28, 29, ..., 71, 72.

Nikul

The price level you choose for price protection on a call option is referred to as: A. The strike price B. The option premium C. The time value D. The intrinsic value

Equity Beta = 0.95 Asset Beta = 0.60 What is the difference between the two betas?

The hedge ratio of a call option is A) A positive constantB) Negative and larger than -1 C) Positive and larger than 1 D) Positive and smaller than 1