Perpetual Call Option

Finance Junkie
Posts: 119
Joined: Mon Sep 17, 2012 11:06 am

Perpetual Call Option

Postby swarnendupathak » Wed Oct 31, 2012 10:24 am

The current price of the share of Company A is Rs. 100 & they pay no dividend. Interest rate is 6% p.a. (30/360), what is the approximate price of the perpetua call option with a strike price of Rs. 100 on 1 share of Company A, if the call will be automatically exercise when the stock reaches Rs. 150.
(a) 18
(b) 25
(c) 33
(d) 50
Please highlight how to value perpetual call & how to solve this problem.



Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: Perpetual Call Option

Postby content.pristine » Wed Oct 31, 2012 5:29 pm

Perpetual Call Options are no longer in the syllabus so don't worry about it..
Where did you get this question?


Return to “FRM Part I”



Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to and we will rectify it.