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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Nente co, Question 1(iii) June 2012
Kindly explain why 2years was used as the time to expiry while calculating the call option instead of 5years.
Thanks.
Because the first sentence under ‘Proposal 2’ in the question, says that they have the right to produce a follow-on product within 2 years – that is when they will be able to exercise the right/option.
Many thanks, Mr John.
You are welcome 🙂