which one is correct please confirm? Q9: An option that gives the owner the right to buy a financial instrument at the exercise price within a specified period of time is a call option put option American option European option
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Q: option
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which one is correct please confirm?
Q9:
call option
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put option
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American option
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European option
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Solved in 2 steps
- which one is corect please confirm? Q8: An option that gives the owner the right to sell a financial instrument at the exercise price within a specified period of time is a put option call option swap premiumWhich of the following statements about European option contracts is true? Question 2Answer a. Typically American options are cheaper than otherwise similar European options due to the uncertainty regarding the date of exercise. b. The price of an option can be obtained by computing the true probabilities of each state of nature, working out the expected option payoff across those states and then discounting back to the present. c. A long call position and a short put position both involve buying the underlying and so are equivalent d. One can synthesise a long forward position in the underlying by being long a call and short a putwhich one is correct please answer? Q7: An option allowing the holder to buy an asset in the future is a put option call option swap premium
- which one is correct please confirm? Q6: The price specified on an option that the holder can buy or sell the underlying asset is called the premium. call. strike price puti)identify, analyze and discuss the following characteristics of an American put option: maximum value, intrinsic value, time value, lower bound, and payoff at expiration. ii) analyze and discuss the following factors on an American put option: time to expiration, exercise price, interest rate, volatility, and dividends. iii) identify, analyze, and discuss the following characteristics of a European call option: maximum value, intrinsic value, time value, lower bound, and payoff at expiration. iv) analyze and discuss the following factors on a European call option: time to expiration, exercise price, interest rate,Select all that are true with respect to options discussed in this module: Group of answer choices Option “moneyness” is sometimes called the “intrinsic value” of the option. A European Option can be exercised any time up to and including the date of maturity, but American Option can be exercised only at the date of maturity. The option “writer” is essentially the original seller of the option. While the option owner has the right, but not the obligation, to exercise an option, the option writer is obligated to follow through on the other side of the transaction if the option owner chooses to exercise. The option premium (option “value”) is made up of the intrinsic value and “speculative” value or time value.
- which one is correct please confirm? Q15: An option that can only be exercised at maturity is called a(n swap stock option European option. American optionConsider a call option selling for Ksh.14 in which the exercise price is Ksh.162 and the price of the underlying is Ksh.164. Determine the value at expiration and the profit for a buyer under the following outcomes: The price of the underlying at expiration is Ksh.164. The price of the underlying at expiration is Ksh.158.Choose all expressions that accurately complete the statement below: Writing a European call option on £10,000 at a strike price of $1.80/£ and a premium of $0.02/£: Group of answer choices Obligates the optionholder to purchase £10,000 for $18,000 USD. Will be profitable for the seller when the price of the GBP exceeds the put-call parity rate. Obligates the writer to sell £10,000 on the expiration date if the optionholder chooses to exercise. Allows the optionholder to exercise the option at any point up to the expiration date. Earns the seller a premium of $200.
- Which one of the following statements correctly describes your situation as the owner of an American call option? Multiple Choice You are obligated to buy at a set price at any time up to and including the expiration date. You have the right to sell at a set price at any time up to and including the expiration date. You have the right to buy at a set price only on the expiration date. You are obligated to sell at a set price if the option is exercised. You have the right to buy at a set price at any time up to and including the expiration date.a)analyze and discuss the following factors on a European call option: time to expiration, exercise price, interest rate, volatility, and dividends. b) identify, analyze, and discuss the following characteristics of a European put option: maximum value, intrinsic value, time value, lower bound, and payoff at expiration. c) analyze and discuss the following factors on a European put option: time to expiration, exercise price, interest rate, volatility, and dividends. d) discuss the relationship between American and European option prices. e) derive the put-call parity and discuss its implications. f) discuss the characteristics of a currency option.Which of the following statements about European option contracts is TRUE? a. Typically American options are cheaper than otherwise similar European options due to the uncertainty regarding the date of exercise. b. One can synthesise a long forward position in the underlying by being long a call and short a put c. A long call position and a short put position both involve buying the underlying and so are equivalent d. The price of an option can be obtained by computing the true probabilities of each state of nature, working out the expected option payoff across those states and then discounting back to the present.