review7 - A11 Intel Option Valuation 1. The above graph is...

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A11 Intel Option Valuation 1. The above graph is for what kind of option? Call 2. How do you determine the option Type? The value of a Call option increases as the underlying asset price increases, so the direction of the curve has a positive correlation Consider the appropriate option with a 15 Strike price and answer the following: 3. Determine the underlying asset price for the option with value V0. $18.42 4. Curve with label 7 is for what date? 1-22-2008 5. For this option determine (V0 – V2) and name this value. V0=$4.00 V2=$3.42 (V0- V2)= $0.58 = Time Value 6. If possible determine (V1-V2) for this option. V1 is unknown 7. For this option determine (V3-V4). V3=$6.30 V4=($21.17-$15.00)=$6.17 ( V3-V4)= $0.13 8. Determine V2 and name this value. V2 is the Intrinsic Value of the Option (Asset Price-Strike Price) =$18.42-$15.00=$3.42 9. Explain the difference between V0 and V3. 10. Why is V3 greater than V0?
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This note was uploaded on 03/30/2012 for the course MANEC 453 taught by Professor Jerrynelson during the Fall '10 term at BYU.

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review7 - A11 Intel Option Valuation 1. The above graph is...

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