27. Table 20.4 lists some prices of options on common stocks (prices are quoted to the nearest...

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27. Table 20.4 lists some prices of options on common stocks (prices are quoted to the nearest dollar). The interest rate is 10% a year. Can you spot any mispricing? What would you do to take advantage of it?

Stock Time to Exercise

(months) Exercise Price Stock Price Put Price Call Price Drongo Corp. 6 $ 50 $80 $20 $52 Ragwort, Inc. 6 100 80 10 15 Wombat Corp. 3 40 50 7 18 6 40 50 5 17 6 50 50 8 10

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