Q637
Second step in binomial approach of option pricing is to define range of values
A.
at expiration
AnswerB.
at buying date
C.
at exchange closing time
D.
at exchange opening time
Answer: Option A
Solution
Answer: Option A
Solution:
Second step in binomial approach of option pricing is to define range of values at expiration. An expiration date in derivatives is the last day that a derivative, such as options or futures, is valid. On or before this day, investors will have already decided what to do with their expiring position.