Briefly discuss the various types of option transaction

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Question 1: Identify and briefly discuss the various types of option transaction costs? (250-300 words)

Question 2: Explain why an option's time value is greatest when the stock price is near the exercise price and why it nearly disappears when the option is deep- in -or out- of -the money. (250-300 words)

Question 3: ABC Company stock currently priced at $ 80. One period later it can go up by 25% or go down by 20%. The risk-free rate is 7 percent. Calculate the current /theoretical value of the European call option if the exercise/strike price is SAR 80?

Reference no: EM133777984

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