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Is it reasonable that: For Stock ABC with the December next year Forward at: $460. A PUT option on ABC, with a strike of $500,
Is it reasonable that:
For Stock ABC with the December next year Forward at: $460.
A PUT option on ABC, with a strike of $500, costs $35?
A. | No because the minimum intrinsic is $40. | |
B. | Yes because it depends on the distribution; that is defined by the volatility and time to maturity | |
C. | No, because $35 feels low for a stock with such a high price per share. | |
D. | Yes because it can be that Intrinsic is $40, Extrinsic negative $5 |
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