Identify and briefly discuss the various types of option

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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 downby 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: EM133778015

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