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Dear sir,
Could please clarify the situation why the examiner uses only one exercise price (95.50) in options calculation in Q.44 Keshi and in Q.45 Daikon only the % (0.8%) increase is considered?
Is it acceptable in exam? as I thought that we should take into account both exercise prices in option calculations along with increases and falls in %.
Thanks.
I do not know whether you are looking at the answer in a Revision Kit or the examiners own answer.
However certainly for both Keshi and for Daikon the examiners answers do consider both exercise prices!!
Ideally you should always consider all of the available exercise prices. If you are short of time then considering only one of them will get you more than the half marks needed, because the most important things is to be able to show that you know how options work.
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