Find Flashcards
Why It Works
More
Educators
Businesses
Academy
About

Brainscape's Knowledge Genome^TM

Browse over 1 million classes created by top students, professors, publishers, and experts.

Entrance Exams
Professional Certifications
Foreign Languages
Medical & Nursing
Science
English
Humanities & Social Studies
Mathematics
Law
Vocations
Health & Fitness
Business & Finance
Technology & Engineering
Food & Beverage
Fine Arts
Random Knowledge

See full index

L1 60 Option Markets and Contracts > l explain how option prices are affected by the exercise price and the time to expiration; > Flashcards

l explain how option prices are affected by the exercise price and the time to expiration; Flashcards

L1 60 Option Markets and Contracts (17 decks)

A - D Options Terminology, The Mechanics of Trading Options

60.F: COMPARE INTEREST RATE OPTIONS WITH FORWARD RATE AGREEMENTS (FRAS)

a describe call and put options;

b distinguish between European and American options;

c define the concept of moneyness of an option;

d compare exchange-traded options and over-the- counter options;

e identify the types of options in terms of the underlying instruments;

g define interest rate caps, floors, and collars;

h calculate and interpret option payoffs and explain how interest rate options differ from other types of options;

i define intrinsic value and time value, and explain their relationship;

j determine the minimum and maximum values of European options and American options;

k calculate and interpret the lowest prices of European and American calls and puts based on the rules for minimum values and lower bounds;

l explain how option prices are affected by the exercise price and the time to expiration;

m explain put–call parity for European options, and explain how put–call parity is related to arbitrage and the construction of synthetic options;

n explain how cash flows on the underlying asset affect put–call parity and the lower bounds of option prices;

o determine the directional effect of an interest rate change or volatility change on an option’s price.

Key Links
Subjects
Company
- About Us
- Earn Money!
- Academy
- Swag Shop
- Contact
- Terms
- Podcasts
- Careers
Find Us

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions