Generalize the Formulas for Determining the Value of the Following

question 118

Essay

Generalize the formulas for determining the value of the following four option types: buying a call, buying a put, writing a call, writing a put.

---

Definitions:

Equilibrium

A situation in which market demand equals supply, resulting in consistent pricing.

Dominant Strategies

In game theory, a strategy that is best for a player in a game regardless of the strategies chosen by other players.

Equilibrium

The state in an economy or market where demand equals supply, leading to stable prices.

Poison Pill

A strategy used by companies to prevent or discourage hostile takeovers by making the company less attractive to the acquirer.