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If option with strike price 96 is rejected then why they have performed whole thing till effective interest rate?
Is it okay if we dont perform whole thing ie premium, cost of borrowing , effective interest rate etc. for rejected options?
There is no option with a strike price of 96.00 – I think you must mean 95.00.
However the answer does not say it will be rejected – only if they take the view that they need to be protected against a fall in interest rates.
The question asks for a discussion and the calculations are need in order to be able to discuss properly.