Localfund.com - All about Fund and Investment
*Home>>>Investment Account

Accounting/Finance Question re: Options?


Why are options with identical exercise prices and maturity dates, are written on stocks with identical prices, selling for different prices? Do options on one of these 2 stocks provide investors with superior investment opportunities in comparison to the other?

I already answered this question. I saw Muncie's answer and he is a topanswerer in investing though I feel his answer is all that right. Stock betas do differ but even Black & Scholes when applies beta into their equation usually come out with the price as the difference between the Exercise price and todays price time e^(krf x t) which I explained earlier. So even if the betas are different, but the stock price, the exercise price and time to maturity is identical for both they will have identical prices. This is a very hypothetical situation and any difference is due to supply and demand. Of course if the stocks have differnet betas it is more than usuall that their prices are different and then this situation you describe is very unlikely to happen. If you want to go into excursions then only you need to worry about this which is valueless thinking.

Tags
  Investment Company   Investment Calculator   Investment Bank   Investment Advice   Investment Account   Invest Money   Invest in Gold   Invest Fund   Income Fund
Related information
  • Accounting help??

    Not enough information. You can buy more shares if the shares are priced at $5 per share, however at $20 per share the company may have a more sound financial standing and a higher dividend.

  • If I max my 401k and put an addl $20k to $40k yr into other investments / funds, do I need an IRA?

    I knew a guy named Ira when I lived in New York city. I would never trust him with any money!!! Don't do it.

    ...
  • Can I have two different IRA accounts?

    Hi Michael, You can have as many IRAs and/or Roth IRAs as you want, and through whomever you want. I have 2 rollovers with Fidelity, one with Vanguard and one with John Hancock. As long as you...

  • With child trust accounts, investing 拢250 initially what is the likeihood of increased money over 18 years?

    If the money is invested wisely, then there is a 99% chance of increased money. You could put the entire 250 into inflation-indexed government bonds. Their return isn't very high, but they...

  • This is an accounting/banking/interest rate question: if someone puts in, say, $20,000 in a CD with an APY of

    $840 approximately. cds accrue based on the term of the cd. if you have it in a year-long cd then you will make 3.5% of $20,000 every month.

    ...
  • Accounting Question? (9) Multiple Choice check?

    I assume this is a long term investment under the Equity Method. Entry on the purchase would be: Jan. 1 dr investment in Samitz Corp. stock 100,000. cr cash 100,000. Dec. 31 dr investment...

  • Calculating total percent gain on real estate investments?

    You can't do it with a single formula. You need to build a stream of cash flows (usually, annual rather than monthly), add property purchase at the front and property disposition at the back ...

  • What do you think of Managed Futures Accounts?

    When you're investing in a managed futures account, you're simply betting on the person running the account. Thats it. Futures correlate with the price of the asset it represents, but t...

  •  

    Categories--Copyright/IP Policy--Contact Webmaster