Why do options sell at prices higher than their exercise values?

Q: What is the market model? How is it different from the SML forthe CAPM?

A: The market model is utilized to show how forces of supply and demand powers cooperate to decide…

Q: Explain Total Return Swap?

A: Swaps are agreement between different businesses and financial institutions  which is customized as…

Q: o you think a person would opt to use the Payback Period Method instead of the Net Present Value or…

A: Given information : . NPV refers to the difference between the sum of the present value of expected…

Q: Where does the discount rate from present value came from? How to solve it?

A: In finance, a reduction rate is that the rate of come wont to discount future money flows back to…

Q: pose stocks X and Y have equal current prices but different volatilities of returns, ax < øy; what…

A: Value of call option depends on the underlying prices and the volatilities of stock return because…

Q: What is the conventional-payback method?

A: Conventional Payback Method

Q: 1) Let us start with what is the difference between a real and a financial asset? 2) What is the…

A: Real assets and financial assets are two distinct types of assets owned by businesses and…

Q: advantages of negative interest rate policies?

A: There are pros and cons of negative interest rate policies. In fact, in my opinion negative interest…

Q: Give some examples of market value analysis?

A: Market value is a strong shareholder richness measuring stick. And besides, what depends is what the…

Q: Discuss the factors that affect an option’s price?

A: The option contract is a type of derivative contract which helps in hedging and speculating against…