Question

1. The payoff from a European style Look-back put option is:
A. The amount that the final asset price exceeds the minimum asset price achieved
during the life of the option
B. The amount that the final asset price exceeds the maximum asset price achieved
during the life of the option
C. The amount that the minimum asset price achieved during the life of the option
exceeds the final asset price
D. The amount that the maximum asset price achieved during the life of the option
exceeds the minimum asset price during the life of the option
E. The amount that the maximum asset price achieved during the life of the option
exceeds the final asset price

2. If the delta of a put option on a $22 strike price expiring in May is 0.25, what is the delta of
a call on a $22 strike price expiring in May?
A. -0.25
B. -0.75
C. 0.50
D. 0.25
E. Impossible to know

Answer 1

ACCORDING TO THEORY, the pay off from the European style look back put is the amount by which the maximum stock price reached during the life of the option exceeds the final stock price.

so correct answer is

E. The amount that the maximum asset price achieved during the life of the option
exceeds the final asset price

ACCORDING TO THEORY,

Delta of a put option ranges from -1 to 0, as put options tend to appreciate when underlying stock goes down. Again, the rate at which the option’s market price moves is never greater than the underlying’s price change, therefore a put option’s delta is never lower than -1.

so delta can not be positive for put option

so answer is E ; impossible to know

so if put