can you plsease answer question askedin photo Payoffs from Options What is the Option Position in Each Case? K = Strike price, S₁ = Price of asset at maturity Payoff Payoff K ST K ST Payoff K ST Payoff K ST
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- What is the correct way to determine the value of a long forward position at expiration? The value is the price of the underlying ... ... multiplied by the forward price. ... divided by the forward price. ... plus the forward price. ... minus the forward price please need type answer not an imageWhich of the following are NOT the determinants of option prices? Select one:i. Average returnii. Time to maturityiii. Underlying priceiv. Interest ratesv. Exercise pricevi. VolatilityWho correctly identifies the effect of increases in volatility of the underlying asset on option prices? Johnny Kyle Linda Johnny Mike [↓ = decrease, t = increase] O Kyle O Linda Call price ↑ ↑ ↓ ↓ Mike Put Price ↑ ↓ ↓ ↑
- What impact does each of the followingparameters have on the value of a call option?(3) Option’s term to maturitya. Explain the covered call options strategy b. Graphically show a covered call options strategy, including payoff. Explain why an investor mayuse this option strategy.c. Using put-call parity, explain the shape of the payoff line (in part (a) of this question). Whatoption position does it look like and why?Who correctly identifies the effect of increases in volatility of the underlying asset on option prices? Johnny Kyle Linda Johnny Mike [↓ = decrease, ↑ = increase] O Kyle O Linda Call price ↑ ↑ ↓ ↓ Mike Put Price ↑ ↓ ↓ ↑
- Black-Scholes Model Assume that you have been given the following information on Purcell Industries call options: According to the Black-Scholes option pricing model, what is the option’s value?Explain in detail with an example how the change of the variables (like Stock Price, Exercise Price, Risk-Free Rate, Volatility or Standard Deviation, and Time to Expiration) of Black-Scholes-Merton Formula affect the price of the option.Does at the money ,in the money, out of the money is used to tell about position of strike price in the market when buy or sell the option only (judge by comparing srike price and the spot price in market at that moment,Is it used to tell status of the option on expiration date by comparing srike price and the market price at expiration date or not, if not please explain to me by using some example to explain it.
- Real Options & Game Theory: The value of a call option and a put option is influenced by the following variables: - Underlying asset value- Strike Price- Variance of Underlying asset- Time to Expiration What effect would an increase in each of these variables have on the value of a calloption and a put option?Theta measures an option's: Multiple Choice O O intrinsic value. volatility. rate of time decay. sensitivity to changes in the value of the underlying asset. sensitivity to changes in the risk-free rate.The premium on a put option is primarily a function of the difference in spot price S relative to the strike price X, the time until maturity T, and the volatility of the currency o. P = f(S-X, T, o) For each characteristic of a put option, use the table to indicate whether that would lead to a higher put option premium or a lower put option premium (all else equal). Characteristic A lower spot price relative to the strike price A shorter time before expiration A higher level of volatility for the currency Higher Put Option Premium Lower Put Option Premium When using a put option to hedge receivables in an international currency, a U.S. based MNC can lock in the receive. minimum maximum amount of dollars it will
