NOTE 1: Be sure to read Homework Format and Homework Writing Policy BEFORE writing up your solutions to be turned in.
NOTE 2: When two or more Lessons are to be turned in on the same day, please staple the Lessons separately and turn them in separately.
Due Tuesday, July 8
Last modified Jul 6, 2008 1:49 PM
- 11.9 Problems:
- Turn in:
11.2*, 11.3**
* For 11.2, first, be sure you read carefully the inequality you are supposed to be explaining, noting the variables in the inequalilty.
Then, try to explain the inequality without using the word “arbitrage” (although there is nothing wrong with doing so).
Updated July 6: To be specific, for the case when the put option is in the money, take the point of view of someone selling a put option. Explain why it wouldn't make sense for the seller of such an option to sell at a price which violates the given inequality.
** Regarding 11.3: Be sure to read Homework Format and Homework Writing Policy BEFORE writing up your solutions to be turned in. In particular, don't turn in a graph with no explicit indication of what it is a graph of.
Be sure to read the problem carefully and make sure you know what the problem is asking you to do. Note that in the case of the call option example, the book draws TWO graphs, one for profit and one for profit per share. Which are you supposed to do in Problem 11.3?
NOTE: As stated on the Course Home Page, all due dates are tentative. Assignments, or parts of assignments, may be postponed to a later date.
Last modified Jul 6, 2008 1:49 PM
Go to Lesson 26 (due 7/3).
Go to Lesson 26a (due 7/9).
Go to Lesson 27 (due 7/7).
Go to Lesson 28 (due 7/8).
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