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When a stock's price could suddenly drop to zero before expire. does black-scholes misprice the option? Too high or Too low?
Quantitative Question – BLACK SCHOLES
Consider a call option on a stock. Assume that Black-Scholes prices the option correctly if all of the assumptions of Black-Scholes hold true. Assume in addition ...
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Where do Over-allotment (Greenshoe) option shares come from?
I'm just wondering, if following an IPO the share price goes up and the underwriter calls the option, where do those extra 15% shares come from?
Does the company have to issue more stock to cover the ...
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