Business Administration - Financial Planning RFC225 Chapter Notes - Chapter 8: Voting, Futures Contract, Call Option
23 Oct 2017
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Chapter 8 equity securities: common and preferred shares. Cds clearing and depository services inc: replaces certificate as evident of ownership of security transactions. Ex-dividend: before dividends are received but declared: dividend record date: all shareholders on this date is entitled to dividends. Obligated -sell: options, when contract is drawn up = premium is paid, zero-sum game: other than commission fees and transaction costs, one perso(cid:374) loses a(cid:374)d other perso(cid:374) wi(cid:374)s" (cid:373)o(cid:374)e(cid:455) European-style options: option can only be exercised on expiration date. Leaps: long-term equity anticipation securities: long term options contracts and offer the same risk and rewards as regular options contracts. Intrinsic value of an in-the-money call option = price of underlying strike price: = - . Intrinsic value of an in-the-money put option = strike price price of underlying. If the price declined to , call buyer sells option for loss . 75.
