Investments, tenth edition

Option Valuation  722

 21.1  Option  Valuation:  Introduction 

722

Intrinsic and Time Values / Determinants of Option Values

 21.2  Restrictions on Option Values  725

Restrictions on the Value of a Call Option / Early Exercise 

and Dividends / Early Exercise of American Puts 

 21.3  Binomial Option Pricing  729

Two-State Option Pricing / Generalizing the Two-State 

Approach / Making the Valuation Model Practical

 21.4  Black-Scholes  Option  Valuation 

737

The Black-Scholes Formula / Dividends and Call Option 

Valuation / Put Option Valuation / Dividends and Put 

Option Valuation

 21.5  Using the Black-Scholes Formula  746

Hedge Ratios and the Black-Scholes Formula / Portfolio 

Insurance / Option Pricing and the Crisis of 2008–2009 / 

Option Pricing and Portfolio Theory / Hedging Bets on 

Mispriced Options