Question 8 You are given the following data on call and put premiums in pence per share for Company ABC shares which are currently priced in the market at 425 pence. Each contract refers to 1000 shares Call premiums in pence Put premiums in pence April strike prices 420 pence 460 pence April 22 6 June 31 12 September 34 15 14. June September 20 27 42 48 39 (i) List all the call and put premiums that are out of the money. (ii) Explain the intuition as to why the premiums rise between April and September. (iii) Which of the above options has the lowest time value? (iv) Explain what you would do using any one of the above premiums if you expect the share price to fall to 300 pence by expiration and the total profit you will make measured in pounds if you are proved correct