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Derivatives and Risk Management, 1st Edition
book

Derivatives and Risk Management, 1st Edition

by Sundaram Janakiramanan
May 2024
Intermediate to advanced content levelIntermediate to advanced
542 pages
27h 26m
English
Pearson India
Content preview from Derivatives and Risk Management, 1st Edition
Call and Put Options 261
In Example 12.1, the buyer of an Ashok Leyland call option is betting that the price of Ashok Leyland
shares will go beyond INR 47.35, which is Exercise price + Option premium paid = INR 45 + INR 2.35 =
INR 47.35, while the writer is betting that the price will not go beyond INR 47.35.
12.2 The Terminal Value of a Call Option
e value of a call option on the exercise date is known as its terminal value. Consider a European option
on the date of maturity. Since it is a European option, it can be exercised only on the exercise date, and
in order to decide whether the buyer should exercise or not, it is important for ...
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Publisher Resources

ISBN: 9781299447547Publisher Website