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  • June 9, 2016 at 4:21 pm #321524
    Avatarfivedollar
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    below are my workings

    h. l
    x. 2. 0.5
    y. 1. 0.75

    x cost -6
    HH 0.2(2*6)=+2.4
    LH/ LL (0.8((0.5*3)+((0.5*(2*3)+0.5*(0.5*3)))=+4.2
    x=0.6

    y cost -4
    HH 0.2(1*6)=+1.2
    LH/ LL (0.8((0.75*3)+((0.5*(1*3)+0.5*(0.75*3)))=+3.9
    y=1.1

    June 9, 2016 at 3:44 pm #321492
    Avatarfivedollar
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    does anyone remember the cost of option y?

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