Hello Class – Please answer the following Questions.
1. What are the five variables that affect the value of an option, and how do changes in each of these variables affect the value of a call option?
2. What does the seller of a put option hope will happen?
3. What is the value of a call option or a put option if the stock price is zero? What if the stock price is extremely high (relative to the strike price)?
4. List and describe four different types of real options that are associated with investment projects.
5. How are options related to the agency costs of debt and equity?
Note:
– Note that each question should be answered in a minimum of 200 – 300 words.
– Be typed, double spaced, using Times New Roman font (size 12), with one inch margins on all sides and heading; citations and references must follow APA format. Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date.You are encouraged to provide detailed answer.
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