Hey - cheers for all the help.
On these two (Q44/45) they calc the future value of the premium using libor + spread. In schweser it’s just libor which makes more sense. Why do they calc the future value using the spread?作者: clearlycanadian 时间: 2013-4-22 07:01
Agreed. The opportunity cost has to factor in the firms borrowing cost. In all liklihood its going to be irrelevant because the impact of a few basis points on the option premium isn’t going to impact the calculated return materially.
