Chapter 63. Pricing Stock Options

  • What are put and call options?

  • What are American and European options?

  • As a function of the stock price on the exercise date, what do the payoffs look like for European puts and calls?

  • What parameters determine the value of an option?

  • How do we estimate the volatility of a stock based on historical data?

  • How can I use Excel to implement the Black-Scholes formula?

  • How do changes in key parameters change the value of a put or call option?

  • How can I use the Black-Scholes formula to estimate a stock’s volatility?

  • I don’t want somebody messing up my neat option-pricing formulas. How can I protect the formulas in my worksheet so that nobody can mess them up?

  • How can option pricing be used to help companies make better ...

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