What Is the Boundary Condition for a European Call Option

question 12

Multiple Choice

What is the boundary condition for a European call option?

• A) Max [0,S(T)-K]
• B) Max [0,K-S(T)]
• C) Min [0,S(T)-K]
• D) Min [0,K-S(T)]

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Definitions:

Antidiuretic Hormone

A hormone produced by the pituitary gland that helps regulate the body's retention of water by increasing the concentration of urine.

Reabsorption

The selective removal of certain substances from the glomerular filtrate by the renal tubules and collecting ducts of the kidney, and their return into the blood.

Blood Pressure

The force exerted by circulating blood on the walls of blood vessels, a critical parameter for assessing cardiovascular health.

Sympathetic Neuron

A neuron that is part of the sympathetic nervous system, which is responsible for the body's 'fight or flight' response by regulating heart rate, blood pressure, and digestive functions.