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Use the information provided in the table below, which shows information regarding the options of Tesla as of November 2 9 , 2 0 2
Use the information provided in the table below, which shows information regarding the options of Tesla as of November The expiration date of Jan denotes an expiration date of Jan Each contract represents shares of Tesla.
a What is the cost to purchase January call contracts, with an exercise price of
b Are the January call options with an exercise price of inthemoney, outofthemoney, or atthemoney? Explain.
c If you were to draw the payoff diagram for the January call options with an exercise price of what would be the breakeven point?
d Do the calls and puts with an exercise price satisfy putcall parity, if the riskfree rate is note this part refers to a different exercise price than that in parts a c If they do not, please show the profits implied by the arbitrage opportunity.
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