Assuming No Rebates Upon Knock-Out,a Down-And-Out Call Option Is Worth

question 18

Multiple Choice

Assuming no rebates upon knock-out,a down-and-out call option is worth less than a vanilla call

• A)When the knock-out barrier lies above the current stock price.
• B)When the knock-out barrier lies below the current stock price.
• C)When the knock-out barrier is far from the strike price.
• D)Always.

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