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Dear Tutor,
Could you please help with the following issues in the quetsion Keshi (12/14):
a) where can we find the information that 0,22 basis points should be added?
b)the examiner used only the options with the ex.price 95,5, how do we know if we are suppose to do the calculations based on all ex.prices available or one only (and how to know which one to choose)?
c) If I understand right we can present our answers as percentages or in monetary terms. Do you have any suggestions when to use either percentages or monetary terms?
Thank you
a) the examiner should have made this clear in the question. He didn’t and so you were given full marks whether you added or subtracted.
b) The examiners answers shows the result for both exercise prices. Ideally you should always look at all exercise prices, but if you are running out of time then you will still get most of the marks by just showing one in full.
c) It doesn’t matter (unless obviously the question specifies which) 🙂
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