"> (Solution) -When moving from valuing an option on a non-dividend paying stock to an option on a currency which of the following is true? Paper Detail – Transwriters

(Solution) -When moving from valuing an option on a non-dividend paying stock to an option on a currency which of the following is true?


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The Question

When moving from valuing an option on a non-dividend paying stock to an option on a currency

which of the following is true?

A) The risk-free rate is replaced by the excess of the domestic risk-free rate over the foreign risk-free

rate in all calculations

B) The formula for u changes

C) The risk-free rate be replaced by the excess of the domestic risk-free rate over the foreign risk-free

rate for discounting

D) The risk-free rate be replaced by the excess of the domestic risk-free rate over the foreign risk-free

rate when p is calculated 

 


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Solution #0009147624341

(Solution) -When moving from valuing an option on a non-dividend paying stock to an option on a currency which of the following is true?.zip

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This paper was answered on 10-Jan-2018

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Jan 10, 2018

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