Yes we have got a function that minimise/maximise a certain cell in excel.
That function is known as (solver). But remember that in order to solve any optimisation problem you need constrains that are subject to the problem you are trying to minimise or maximise. This is usually found in the question. Please note that you have to see this for your self the examiners won't tell you. In the case of the April 2019 examination we want to maximise the probability cell such that
(1000*So)+(a*Co)+(b*Po)=10076(constrain which you will need when you use solver in excel).
So- initial share price
Co-value of the call option at time 0
Po-value of the put option at time zero.
Please use solver in excel and let me know if you are happy
Last edited by a moderator: Sep 9, 2019