Class 14 Option Valuation Lines & Sample Question.

Class 14 Option Valuation Lines & Sample Question....

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Class 14 Chapter 9 Review of option value lines. 1) The time-value + intrinsic value line for a PUT Contract is drawn below. Explain why it has the shape it does. 2) The time-value + intrinsic value line for a Call Contract is drawn below. Explain its shape. Why does it have the opposite shape of the put contract?
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3) Answer the questions below based on the graph and data on the next page for the listed option contracts. 1. The above graph is for what kind of option? 2. How do you determine the option Type? Consider the appropriate option with a 15 Strike price and answer the following: 3. Determine the underlying asset price for the option with value V 0 4. Curve with label 7 is for what date?
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5. For this option determine ( V0 V2) and name this value 6. If possible determine (V 1 -V 2 ) for this option. 7. For this option determine (V 3 -V 4 ). 8. Determine V 2 and name this value. 9. Explain the difference between V 0 and V 3 .
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This note was uploaded on 02/22/2012 for the course MANEC 453 taught by Professor Jerrynelson during the Winter '10 term at BYU.

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Class 14 Option Valuation Lines & Sample Question....

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