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Financial Mathematics Essay
Essay specific features


Written by:
Chris F
Date added:
April 21, 2016
Level:
University
Grade:
A
No of pages / words:
12 / 3081
Was viewed:
7660 times
Rating of current essay:
Essay content:
The one I shall examine in this report is call options. A call option is a financial contract between the buyer and seller of that option. There are two types of call options: a European call option and a European Put Option.
Definition 1:
A European Call Option allows its buyer the right (but no the obligation) to purchase from the seller, of set option, a predetermined asset for a pre-agreed price (strike price) at a particular time in the future (the expiration date) (b)...
displayed 300 characters
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We can denote the value of the European call option & put option at their expiration date, by C & P respectively.
It should be clear from their definitions that:
C = max (ST – K, 0)
P = max (K - ST, 0)
Where K is the strike price (the pre-agreed price at which the holder of the option can buy/sell) and ST is the price of the asset at the expiry date, T...
displayed 300 characters
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