Vendor Image

Ito's Dilemma

Eades, Kenneth M.

Case

Ito's Dilemma

Eades, Kenneth M.

F-1283 | Published July 13, 2000 | 3 pages Case

Collection: Darden School of Business

Product Details

This case introduces students to the concepts of option valuation and asks them to estimate option prices using the Black-Scholes pricing model. It illustrates the importance of volatility to option pricing and allows the introduction of the concept of implied volatility. The case is used most effectively in sequence with “Ito’s Delight” (UVA-F-1333) to introduce option-pricing concepts. Different versions of this teaching plan have been successfully used for both MBA and executive-education audiences.

0