PRINCIPLES OF OPTION PRICING The following quotes were observed for options on a given stock on November 1 of a given year. These are American calls except where indicated. Use the information to answer questions 1 through 15. Calls Puts Strike Nov Dec Jan Nov Dec Jan 105 8.40 10 11.50 5.30 1.30 2.00 110 4.40 7.10 8.30 0.90 2.50 3.80 115 1.50 3.90 5.30 2.80 4.80 4.80 The stock price was 113.25. The risk free rates were 7 30 percent (November). 7.50 percent (December) and 7.62 percent (January). The times to expiration were 0.0384 (November), 0.1342 (December), and 0.211 (January). Assume no dividends unless indicated. 1. What is the intrinsic value of the December 115 put? a. 1.75 b. 0.00 C. 3.90 d. 3.00 none of the above e. 2. What is the intrinsic value of the November 105 put? a. 0.30 b. 8.25 c. 8.50 d. 0.00 e. none of the above 3. What is the intrinsic value of the January 110 call? a. 0.00 b. 8.30 C. 3.75 5.00 e. none of the above d. PRINCIPLES OF OPTION PRICING The following quotes were observed for options on a given stock on November 1 of a given year. These are American calls except where indicated. Use the information to answer questions 1 through 15. Calls Puts Strike Nov Dec Jan Nov Dec Jan 105 8.40 10 11.50 5.30 1.30 2.00 110 4.40 7.10 8.30 0.90 2.50 3.80 115 1.50 3.90 5.30 2.80 4.80 4.80 The stock price was 113.25. The risk free rates were 7 30 percent (November). 7.50 percent (December) and 7.62 percent (January). The times to expiration were 0.0384 (November), 0.1342 (December), and 0.211 (January). Assume no dividends unless indicated. 1. What is the intrinsic value of the December 115 put? a. 1.75 b. 0.00 C. 3.90 d. 3.00 none of the above e. 2. What is the intrinsic value of the November 105 put? a. 0.30 b. 8.25 c. 8.50 d. 0.00 e. none of the above 3. What is the intrinsic value of the January 110 call? a. 0.00 b. 8.30 C. 3.75 5.00 e. none of the above d