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Ask the Tutor ACCA AFM

Options

FFaisal4y ago
Is it necessary to show the calculations with both the exercise prices? can't we just use one exercise price and compare it with the futures price?
John MoffatJohn MoffatTutor4y ago#1
Ideally you should show the calculations of all exercise prices (and after doing it for one it is actually very quick to do it for the second). Simply comparing with the futures price is not enough because of the premium. However if you are short of time then just showing for one option price will get most of the marks because the important thing is to prove that you know how options work.
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