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Time Value Of Call Option = Call Option Price - Intrinsic Value can there be a negative time value? if you got rid of the intrinsic value (which amounts to zero in the worst case) ... that would leave you with time value = call option price So i think stock price would go zero. Not sure...

Intrinsic value For example, If a call options excercise price is $5 and the underlying stock's market price is at $15, then the intrinsic value of the call option is $10. However if its out the money, the intrinsic value is 0 ... no negative numbers My understanding of time value Time...

Re: Quiz 3 yeah i can't see mine either

Re: The old end of semester / mark prediction thread whatever i rekon your going to D 253, you know sooo much more than me! If your only hoping for a pass... im hoping for a PC :S:S

i definately need to goto pal

ok so if ur using the binomial approach, you need to figure out the risk neutral probabilities in order to figure out value of the option if it increases/decreases

Is there a difference between risk neutral approach and the binomial model?? they look pretty similar

guys where are you? i need a support network for ACCG253? please post questions problems etc and i'll try and help... lets keep this thread going! so far ive studied, fishers, capital structure 1,2 and value options... post up guys!

ok what a wonderful person has just told me that the answer to investor x purchased shares in ABC pTY. Ltd for $21 a share. Currently a share sells for $41. The purchase may shortly increase to $50. However, Investor X would like tp protect the current profit. The answer is Investor X should...

quiz 3 lol

im guessing the answer is that because the current profit is 20 bucks you'de need to buy a put which gives you the right to sell at 40 (if the current price reached 50) because you'de need to replicate your profit of 20. i.e make up the difference ... you'de lose 10 of your current profit if...

im trying to do a practice question investor x purchased shares in ABC pTY. Ltd for $21 a share. Currently a share sells for $41. The purchase may shortly increase to $50. However, Investor X would like tp protect the current profit. The answer is Investor X should buy a put option with an...

Re: The old end of semester / mark prediction thread hopeful are u doing accg253??!

ok i got it .. so its the present value of the lowest possible share price

hey guys for option 1 lecture slide 22... how in the world did they get 20.24??

yeah im doing option valuation now and it is reallly reallly hard :S:s does anyone have msn messenger that wants to chat or just use each other in terms of getting things add me ac_sebastian@hotmail.com

so how are you guys studying this subject? I'm going through option valuation 1 and it is sooooo unbelievably hard grrrr capital structure one and two wasn't too bad does anyone have msn messenger? who does accg253 ? add me ac_sebastian@hotmail.com

Re: The old end of semester / mark prediction thread P P P P hoping no F's!! :S:S:S

Congratulations Mike and Steve! :) So now what?? hehe.. are you guys free for the rest of the year? :) What does steve think about doing honours?

lol i got you pwar