A9 PUT & Call Contract Value Line (1)

A9 PUT & Call Contract Value Line (1) - a) At...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
A9 Option Contract Value lines For this assignment, carefully read the section in the text that discusses option valuation and particularly the relation that option value = time value + intrinsic value. Given this relation, select the colored value “lines” below that represent intrinsic value and time value and place them on the appropriate graph axis. Label them for the following three times:
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: a) At expiration b) With one year to expiration c) With 6 months to expiration 1) Draw both the time-value & intrinsic value line for a PUT Contract by selecting from the colored lines shown below and placing them on the axis below. 2) Draw the same lines for a Call Contract by selecting from the colored lines shown below and placing them on the axis below....
View Full Document

This note was uploaded on 02/22/2012 for the course MANEC 453 taught by Professor Jerrynelson during the Winter '10 term at BYU.

Ask a homework question - tutors are online