1. Some of the quotes below are clearly mispriced. In fact, there are at least 6 quotes that violate various price behaviors of options. Identify the mispriced options by their nature (call or put), their strike price, and the expiration month and then state which relationship/pricing rule is being violated.

			Calls	Puts
Option and NY Close	Exercise/ Strike Price	Expiration	Vol.	Last	Vol.	Last
GM	5	November	89	1.12	41	.15
6.80	5	December	85	1.15	22	.10
6.80	8	November	5	1.15	41	1.10
6.80	8	February	60	.45	55	1.20

5. What are the prices of a call option and a put option with the following characteristics?

• Stock price = $73
• Exercise price = $70
• Risk-free rate of return = 4%, compounded continuously
• Maturity = 8 months
• Standard deviation = 49% per year.

Produce answers in excel sheet.