Suppose you check the Wall St. Journal online and see Horizon Inc. trading at $51 per share. On the Chicago Mercantile Exchange, calls on Horizon with one month to expiration and an exercise price of $46 are trading in the market at $6.00 each. Puts on Horizon with one month to expiration and an exercise price of $55 are trading in the market at $3.00 each.

a) What is the intrinsic value of the call versus the put option?

b) Calculate the time value of the call and put options. .

c) Are these time value prices reasonable in both cases?