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Question 6 continued: c). Suppose for the six call options and five put options, you observe their current option prices in the two tables below:
Question 6 continued: c). Suppose for the six call options and five put options, you observe their current option prices in the two tables below: Table: Call option premium with different strike prices Call Option Premium $4.26 $3.58 $2.96 Strike Price, X $20 $21 $22 $2.40 $23 $2.96 $24 $1.45 $25 Table: Put option premium with different strike prices Put Option Premium $4.05 $4.69 Strike Price, X $26 $27 $5.38 $28 $5.90 $29 $7.08 $30 Assume among all the option contracts above, there are one call option and one put option that are being mispriced, respectively. That is, their prices deviate from the theoretical value. Explain which call and which put are the mostly likely being mispriced and why. (Your answer should be no longer than 150 words) (4 marks)
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