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A call option with exercise price of $120 is priced at $3, the underlying security price is $125. At the same time, a put option
A call option with exercise price of $120 is priced at $3, the underlying security price is $125. At the same time, a put option for the same underlying security with the same exercise price and maturity, is price at $3. Assume both options are of American style. Which of the following most likely to be correct?A.Both options are overpriced. B. The call option is underpriced. C. The put option is overpriced.D. Both options are underpriced. E. None of the above.
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