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I got a question from a hedge fund interview:Assume a down-and-out call barrier option, with strike = 90 and barrier = 90. The current spot = 100. Interest rate and dividend are 0. What is the option value?I didn't solve it out during the interview, but later know it = 10 (regardless of the vol), based on some online option calculator.But can someone explain intuitively why it = 10?[URL unfurl="true"]https://shiny.derivativesacademy.com/app/barrieroptions[/URL][ATTACH=full]48298[/ATTACH]
I got a question from a hedge fund interview:
Assume a down-and-out call barrier option, with strike = 90 and barrier = 90. The current spot = 100. Interest rate and dividend are 0. What is the option value?
I didn't solve it out during the interview, but later know it = 10 (regardless of the vol), based on some online option calculator.
But can someone explain intuitively why it = 10?
[URL unfurl="true"]https://shiny.derivativesacademy.com/app/barrieroptions[/URL]
[ATTACH=full]48298[/ATTACH]
