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Given a Current Stock Price SS , Strike Price KK , and Barrier

Question 27

Multiple Choice

Given a current stock price SS , strike price KK , and barrier HH , which of the following statements is most valid?


A) Given H<K<SH < K < S , if the barrier HH is moved lower, then a down-and-in put increases in value and a down-and-out put falls in value.
B) Given H<S<KH < S < K , if the barrier HH is moved lower, then a down-and-in put and a down-and-out put both increase in value.
C) Given H<K<SH < K < S , if the barrier HH is moved lower, then a down-and-out call increases in value and a down-and-in call decreases in value.
D) Given H<K<SH < K < S , if the barrier HH is moved lower, then a down-and-out call and a down-and-in call both increase in value.

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