Mastering Economics & Finance with a Dynamic Twist!

Ankita taught Olivia about option pricing using the binomial model, covering replicating portfolios, arbitrage, and calculating call and put option values. They applied these concepts to firm valuation, treating equity as a call option, and discussed real options and their impact on project value.

Ankita taught Olivia about call and put options, their payoff diagrams, and the concept of put-call parity. They also discussed the factors affecting option prices, such as stock price, strike price, volatility, and time to expiration. The session introduced the binomial model for option valuation, with a more detailed explanation planned for a future session.

Ankita taught Olivia about call and put options, explaining their mechanics, profitability conditions ('in the money,' etc.), and the differences between buying versus selling options. The session also covered American versus European option exercise styles.

Ankita taught Olivia about WACC, including its calculation and use in NPV analysis for project decisions. Olivia practiced applying WACC to a machine replacement project. They scheduled a follow-up session to discuss options.

Ankita taught Olivia about the Capital Asset Pricing Model (CAPM), covering key concepts, practical applications, and the relationship between CAL and SML. They discussed optimal asset allocation and scheduled their next session.