Wasteoftime

markCFAIL Wrote:
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> Nicob, for the option part... they are I think,
> referring to minimum value. In which case, yes,
> it would be 0 or the greater of S-(X/1+RFR^t)
>
> Thats the minimum value for both Euro and American
> Calls, max for both is just stock. It's confusing
> to me because this is true for stock options, and
> i GUESS interest rate options (according to them),
> but in the book under the specific section on
> interest rate options i found them only saying it
> was the strike minus contract adjusted for the
> period, no discounting was shown, anywhere, only
> for FRA's. So im just confused.
>
> Chuck - as discussed below, if they are already
> piling into LT bonds (demand>supply), why do they
> need to entice people with higher yields?

They wouldn't. My brain was fried at that point. I think that was probably the 500th question I had looked at.