Louise Ito studied option price data from the Wall Street Journal. You want to make sure that they have the basic principles behind option pricing goes and checks whether these prices are consistent with respect to the effects of the exercise price and maturity. They also calculated the intrinsic and the time value for each of the options and compares their relative sizes, suggesting the theory. This case is a two-day sequence of teaching fundamentals taught during the first day of … Read more »

Louise Ito studied option price data from the Wall Street Journal. You want to make sure that they have the basic principles behind option pricing goes and checks whether these prices are consistent with respect to the effects of the exercise price and maturity. They also calculated the intrinsic and the time value for each of the options and compares their relative sizes, suggesting the theory. This case is during the first day in a two-day sequence mediating the basics of option pricing (Ito dilemma UVA-F-1283 Second-day event) taught. The teaching curriculum includes a note on how to effectively teach this case and includes several examples that highlight the determinants of option valuation.
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from
Giorgos Allayannis,
Kenneth Eades
Source: Darden School of Business
2 pages.
Publication Date: Jul 13, 2001. Prod #: UV4652-PDF-ENG
Ito Delight HBR case solution