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I had learnt there is a short way to choose a strike price for options during the exam but in this question, I seem to be confused at choosing the correct strike price so as to save my time.
Please helpalso how to determine the currency of the contract for Options in situations such as this question?
There is never a ‘best’ strike price to choose. Different strike prices give better limits but have a higher premium which may end up being wasted.
In the exam, ideally you should illustrate using all available strike prices, and then discuss, but if short of time you will get most of the marks by just using one strike price – the marks are mainly for proving that you know how options operate.The question says that are options in Wirtonia $’s.
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