{"id":44270,"date":"2024-04-15T21:41:22","date_gmt":"2024-04-15T21:41:22","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=44270"},"modified":"2024-04-15T21:41:22","modified_gmt":"2024-04-15T21:41:22","slug":"in-binomial-approach-of-option-pricing-model-last-step-for-finding-an-option-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-binomial-approach-of-option-pricing-model-last-step-for-finding-an-option-is\/","title":{"rendered":"In binomial approach of option pricing model, last step for finding an option is"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;price hike&#8221; option2=&#8221;price value&#8221; option3=&#8221;put price&#8221; option4=&#8221;call price&#8221; correct=&#8221;option4&#8243;]<!--more--><\/p>\n<p>The correct answer is D. call price.<\/p>\n<p>In the binomial approach of option pricing model, the last step for finding an option is to calculate the call price. The call price is the maximum amount that a buyer of a call option is willing to pay for the option. It is equal to the expected value of the payoff of the option, which is the difference between the strike price and the stock price at expiration, multiplied by the probability of the stock price being above the strike price at expiration.<\/p>\n<p>The other options are incorrect. Price hike is not a step in the binomial approach of option pricing model. Price value is the value of an asset, which is not the same as the call price. Put price is the price of a put option, which is the opposite of a call option.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;price hike&#8221; option2=&#8221;price value&#8221; option3=&#8221;put price&#8221; option4=&#8221;call price&#8221; correct=&#8221;option4&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-44270","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>In binomial approach of option pricing model, last step for finding an option is<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/in-binomial-approach-of-option-pricing-model-last-step-for-finding-an-option-is\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In binomial approach of option pricing model, last step for finding an option is\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;price hike&#8221; 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