orientleon

I am not too sure now, what u explain seem reasonable. primarily, i agree.

 

but i just recall  a graph i saw on the notes. below the market yield, the call option value increases as the interest drop, vis versa, if market interest rates rise, the the value of call option DECREASE,

 

I ll be back in a min, and check the notes, update u the page no.

 

   

orientleon

pls refer to page 28 notes 5, figure 3,


as interest rate raises, the call option value decease!

orientleon

QUOTE:

以下是引用88link88在2009-12-4 14:25:00的发言：

Corret it," as interest rate raises, the bond call option value decrease, stock call option value increase."

thx very much. pro enough!

[此贴子已经被作者于2009-12-4 14:46:27编辑过]

orientleon

QUOTE:

以下是引用88link88在2009-12-4 14:25:00的发言：

Corret it," as interest rate raises, the bond call option value decrease, stock call option value increase."

indeed, the original figure was stated for bonds