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After completing this reading, you should be able to:
- Identify the six factors that affect an option’s price.
- Identify and compute upper and lower bounds for option prices on
non-dividend and dividend paying stocks.
- Explain put-call parity and apply it to the valuation of European and
American stock options, with dividends and without dividends, and
express it in terms of forward prices.
- Explain and assess potential rationales for using the early exercise
features of American call and put options.
2 июн 2023
