chapter 16
Pricing Options
Learning Objectives
After reading this chapter, you will be able to understand
- the rational boundaries of option contracts
- the binomial model of option pricing
- the Black-Scholes model of pricing options
- the difference in valuation of American and European options
- put-call parity
- the limitations of the pricing of options
Chapter Outline
16.2 Rational Boundaries of Option Contracts
16.3 Variations in the Basic Structure of Options
16.4 Binomial Option Pricing Model
16.5 Black-Scholes Option Pricing Model
16.6 Pricing Options on Futures
16.7 Put-Call Parity Relationship
16.8 Comparison of Black-Scholes with Binomial Valuations
16.10 Criticism on Option-Pricing Models
THE ...
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