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Assume that the CCIR is 4%. The spot price of the underlying assets for each option below is $15. A Put option with expiration in

Assume that the CCIR is 4%. The spot price of the underlying assets for each option below is $15.



A Put option with expiration in 12 months from now and strike price $5 (per share) is currently trading at $4.9. Is there a mispricing. If so, specify how you would exploit it.
A Call option with expiration in 12 months from now and strike price $5 (per share) is currently trading at $0. Is there a mispricing. If so, specify how you would exploit it.

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Answer Yes there is mis pr icing in both options For the Put option the intrinsic value ... blur-text-image

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