Podcast
Questions and Answers
Which of the following best defines a Compound Option?
Which of the following best defines a Compound Option?
- An option with a higher premium due to added features
- An option with an underlying asset that is another option (correct)
- An option with unlimited profit potential
- An option that can only be exercised on specific dates
If the starting time of a compound option is greater than 0, what type of compound option is it?
If the starting time of a compound option is greater than 0, what type of compound option is it?
- American-style compound option
- Deferred compound option (correct)
- Exercisable compound option
- Immediate compound option
What does 't1' represent in a compound option?
What does 't1' represent in a compound option?
- Starting time of the compound option
- Expiry of the underlying asset
- Expiry of the compound option (correct)
- Strike price of the embedded option
In a call-on-call option, what is needed for the option to have a payoff?
In a call-on-call option, what is needed for the option to have a payoff?
What is the purpose of the rebate feature in options when the barrier is hit?
What is the purpose of the rebate feature in options when the barrier is hit?
In a compound option, what does 'St' represent?
In a compound option, what does 'St' represent?
What is the payoff of a down-and-in call option with a barrier of 39 and a strike price of 40 when the underlying asset price is 41?
What is the payoff of a down-and-in call option with a barrier of 39 and a strike price of 40 when the underlying asset price is 41?
In a down-and-out put option with a barrier of 39 and a strike price of 40, what is the payoff if the underlying asset price in 3 months is 35?
In a down-and-out put option with a barrier of 39 and a strike price of 40, what is the payoff if the underlying asset price in 3 months is 35?
For an up-and-in call option with a barrier of 41 and a strike price of 40, what is the payoff when the asset price is 42?
For an up-and-in call option with a barrier of 41 and a strike price of 40, what is the payoff when the asset price is 42?
Calculate the price of a 3-month up-and-out put option with a barrier of 41 and a strike price of 40 if the underlying asset price remains at 38 throughout.
Calculate the price of a 3-month up-and-out put option with a barrier of 41 and a strike price of 40 if the underlying asset price remains at 38 throughout.
For a put-on-put option with a strike price of 40, what is the payoff if the underlying asset price in 3 months is 41 and in 9 months is 36?
For a put-on-put option with a strike price of 40, what is the payoff if the underlying asset price in 3 months is 41 and in 9 months is 36?
In a call-on-put option scenario with a strike price of 40, what is the payoff when the underlying asset price is 37 in 3 months and 36 in 9 months?
In a call-on-put option scenario with a strike price of 40, what is the payoff when the underlying asset price is 37 in 3 months and 36 in 9 months?
What is the correct formula for standard look-back call payoff?
What is the correct formula for standard look-back call payoff?
In an extreme look-back put option, what does the payoff formula represent?
In an extreme look-back put option, what does the payoff formula represent?
What is the value of the underlying asset at expiration (ST) given S0 = 150 and S3 = 200?
What is the value of the underlying asset at expiration (ST) given S0 = 150 and S3 = 200?
For an extreme look-back call option with a strike price of 100, what is its payoff if the maximum value of the asset over the period is 210?
For an extreme look-back call option with a strike price of 100, what is its payoff if the maximum value of the asset over the period is 210?
What is the sum of the payoffs for a standard look-back put, an extreme look-back call with a strike of 100, and an extreme look-back put with a strike of 100 given ST = 200, max = M = 210, min = m = 120?
What is the sum of the payoffs for a standard look-back put, an extreme look-back call with a strike of 100, and an extreme look-back put with a strike of 100 given ST = 200, max = M = 210, min = m = 120?
In a look-back option, what does 'm' represent?
In a look-back option, what does 'm' represent?
