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Suppose you purchase a put option on IBM common stock with a strike price of $35 per share and an expiration date in September 1.

Suppose you purchase a put option on IBM common stock with a strike price of $35 per share and an expiration date in September image text in transcribed

1. Suppose you purchase a put option on IBM common stock with a strike price of $35 per share and an expiration date in September. The current price of IBM is $37 and the option premium is $1 (a) What is the intrinsic value of the option? (b) As the expiration date on the option approaches, what will happen to the size of the option premium

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