QUESTION 12

1. Consider the prices for the September 2015 call options in the table below.

   

   Identify the September call option with the highest intrinsic value and calculate its time value using its mid-market (average of bid and offer) prices. Assume in that the current mid-market stock price is $532.27

   		14.63
   		23.58
   		19.00
   		10.90
   		10.18

Strike price ($) June 2015 Sept. 2015 Dec. 2015 Bid Offer Bid Offer Bid Offer 475 57.90 61.80 66.00 68.90 73.50 76.50 500 34.80 37.10 45.90 47.90 54.90 56.60 525 16.70 17.30 30.40 31.30 40.20 41.10 550 5.60 6.20 18.60 19.40 28.10 29.00 575 1.55 1.80 10.50 11.30 18.80 20.20