Скачать или смотреть CA Final AFM | Probability in Call Options | Concept Explained + ICAI Q 21 Solved | Derivatives

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🎯 What This Video Covers:
In this insightful video from The Imperfect CA, we solve a highly conceptual and practical question on probability-based decision-making in Call Options – a very common real-world scenario and a frequently tested topic in CA Final AFM’s Derivatives chapter.

📌 Highlights of the Video:
• How to use the up and down factor (u/d) in option pricing
• What does the calculated probability of rise really mean?
• How to interpret p (probability of price rising) practically
• When is buying a call option actually justified?
• Real-world logic: Not just maths, but the decision-making behind options
• Connecting the concepts of risk-free rate, expected return & volatility range
• Visual & clear walkthrough of the question-solving steps
• How to use the given values of e^rt to calculate correct probabilities
• Understanding uncertainty in stock prices from a strategic perspective

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📘 Question Snapshot:
Sumana is considering buying a 1-month call option on EIL stock.
• Current share price: ₹421
• Expected range: ₹411 (low) to ₹592 (high)
• Call option strike price: ₹522
She wants to know the probability that the price will hit ₹592, so that the call becomes worth exercising.
You’re asked to:
✅ Calculate the up & down factors
✅ Compute probability using the risk-neutral formula
✅ Help her decide if buying the option is a logical move

📚 Based On:
– ICAI Study Material – Derivatives
– Also relevant for RTP/MTP practice
– Must-know logic for any future-facing AFM question

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🎓 Who Should Watch This Video:
• CA Final AFM Students (Sep 2025 / Jan 2026 / May 2026)
• Students preparing for option pricing problems with logic & clarity
• Aspirants who want to understand probability, not just mug formulas
• CFA/Finance/MBA students learning binomial logic in options
• Beginners trying to make practical sense of call option decisions

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🧠 Conceptual Tip:
Don’t just see “p” as a number. Think of it as your confidence level in stock reaching profitable zones. Higher the “p”, stronger your justification for buying the call.

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🎥 About This Channel – “The Imperfect CA”
Here, we don’t teach to just “get marks”. We break concepts down like a mentor would:
• 100% ICAI-based solved questions
• Conceptual videos for real clarity
• iPad + voiceover explanations for visual learners
• Weekly uploads & community interaction
• Practical, exam-focused, no-fluff content

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