Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Options:Exercise Price
- This topic has 7 replies, 2 voices, and was last updated 9 years ago by
John Moffat.
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- November 1, 2014 at 9:22 pm #207139
Sir I am having hard time in finding out about how exactly do we choose exercise price for options? Currency options to be precise..
November 1, 2014 at 9:43 pm #207140Also, please explain the way we get the exercise price right for interest rate options.
November 2, 2014 at 9:56 am #207200Unless the questions states a specific objective (i.e. a maximum or minimum exchange rate / interest rate to aim for) then ideally you should calculate for all the exercise prices available and then discuss.
However most of the marks are gained by proving that you know how options work, and so if you are short of time then just pick any one of the exercise prices available.November 2, 2014 at 11:48 am #207229Any exercise price? and then state assumption right?
November 2, 2014 at 12:46 pm #207241That is correct 🙂
November 2, 2014 at 7:31 pm #207300Thanks a ton 🙂
November 3, 2014 at 4:41 pm #207420You are welcome 🙂
November 3, 2014 at 4:41 pm #207421You are welcome 🙂
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