Analyst Dojo

Learning Module 8 of Derivatives 5–8% of the exam

Pricing and Valuation of Options

7 lessons. About 0 minutes in cram mode, 0 minutes in full.

Lessons for this module are being written. The outcomes and lesson plan below are final.

Lessons

  1. 1
    Option Value relative to the Underlying Spot Price

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  2. 2
    Option Exercise Value

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  3. 3
    Option Moneyness

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  4. 4
    Option Time Value

    Coming soon

  5. 5
    Arbitrage

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  6. 6
    Replication

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  7. 7
    Factors Affecting Option Value

    Coming soon

What the exam expects you to do

  1. Explain the exercise value, moneyness, and time value of an option.
  2. Contrast the use of arbitrage and replication concepts in pricing forward commitments and contingent claims.
  3. Identify the factors that determine the value of an option and describe how each factor affects the value of an option.