• Stock ABC was last trading at $162.00. Use the table below to answer the following questions.

	Call	Put
Strike Price	April	July	October	April	July	October
140.00	23.50	25.00	27.50	0.50	1.25	2.00
150.00	16.00	21.00	25.00	1.00	3.75	5.00
160.00	9.00	14.00	20.00	3.00	7.00	9.00
170.00	3.00	9.00	13.25	9.00	10.00	11.00
180.00	1.25	5.25	9.00	12.00	20.00	24.00

• If exercised immediately, which call options would be profitable?
• If exercised immediately, which put options would be profitable?
• Calculate the intrinsic value of the April 150 and October 170 calls. What are the reason(s) for the difference(s) in intrinsic value?
• Calculate the intrinsic value of the April 150 and October 170 puts. What are the reason(s) for the difference(s) in intrinsic value?
• If the stock price closed the following day at 164, which options would you expect to increase? decrease?

• Red Dog has announced a rights offering to raise $60 million. Its stock currently sells for $55 per share and there are 4.5 million shares outstanding. The subscription price is set at $40 per share.
• How many shares must be sold?
• How many rights will it take to buy one share?
• Assuming the stock is still worth $55 when the stock goes ex rights, what is the value of a right?
• What is the value of a share once the rights are detached?