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Choosing the correct strike price with Interest rate options

Forums › ACCA Forums › ACCA AFM Advanced Financial Management Forums › Choosing the correct strike price with Interest rate options

  • This topic has 2 replies, 2 voices, and was last updated 12 years ago by Avatartoobaalvi.
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  • May 31, 2013 at 6:26 pm #128010
    Avatarleeb0521
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    • Topics: 1
    • Replies: 0
    • ☆

    In an interest rate options question, how do we know which strike price to use if not mentioned in the question?
    Is it that we use the price closest to the current LIBOR?

    June 1, 2013 at 1:23 am #128059
    Avatartoobaalvi
    Member
    • Topics: 12
    • Replies: 20
    • ☆

    https://opentuition.com/topic/how-to-choose-the-exercise-price-in-options/

    June 1, 2013 at 1:23 am #128060
    Avatartoobaalvi
    Member
    • Topics: 12
    • Replies: 20
    • ☆

    you can see the snswer here

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