Q.74
I know option B is right
But why is option C wrong,is it because of the fact that the market have already entertained the news of bankruptcy and the prices are according to that only.
Sahil SuranaPro
Basics of derivative pricing and valuations
Share
What I can interpret is: Why would you want to buy shares of a company which is going to declare bankruptcy? A call option means- The Right to Buy the underlying (shares in this case) and not an obligation. So, why would you want to exercise the call option? You can choose not to exercise your right and let the Call option lapse. Hence, option C is wrong.