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financial derivatives - subject briefly pls - I need to submit 1-2 handwritten A4 pages....

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financial derivatives - subject briefly pls - I need to submit 1-2 handwritten A4 pages.

QUESTION (A) Under a binomial option pricing model, the current stock price of a put is at RM4 in which we expect the price can either go up by 5% percent or down by 3 percent with 60% and 40% probability respectively. The risk-free rate is 2 percent per year. Assume the price changes three times per year. Solve the following questions. (i) What are the possible stock prices at the maturity date? (ii) What are the possible intrinsic values at the maturity date? (iii) Calculate the put price. (iv) Explain what influences your result in (iii). (B) Discuss the THREE (3) applications of the delta. (C) Given the following information, answer the questions. Assume the current CI is at 1575 level. Name Month O.I. Sett. Price Sep 2021 44 OKLI C 1570 OKLI P 1570 15.50 Sep 2021 24 5.00 OKLI C 1580 Sep 2021 26 9.60 OKLIP 1580 Sep 2021 7 9.10 OKLI C 1590 Sep 2021 21 5.40 OKLI P 1590 Sep 2021 85 14.90 (i) Explain which contract is in-the-money and out of money. (ii) Why are out of money call & put options cheaper

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