Question
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $69. Calls Puts Option and NY
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $69. |
Calls | Puts | ||||||||||||||||
Option and | |||||||||||||||||
NY Close | Expiration | Strike Price | Vol. | Last | Vol. | Last | |||||||||||
RWJ | |||||||||||||||||
Mar | 64 | 239 | 4.10 | 169 | 4.20 | ||||||||||||
Apr | 64 | 179 | 9.95 | 136 | 8.95 | ||||||||||||
Jul | 64 | 148 | 10.80 | 52 | 12.20 | ||||||||||||
Oct | 64 | 69 | 11.70 | 20 | 11.35 | ||||||||||||
a-1. | Are the call options in or out of the money? | ||||
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a-2. | What is the intrinsic value of an RWJ Corp. call option? (Do not round intermediate calculations.) |
Intrinsic value | $ |
b-1. | Are the put options in or out of the money? | ||||
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b-2. | What is the intrinsic value of an RWJ Corp. put option? (Do not round intermediate calculations.) |
Intrinsic value | $ |
c. | Two of the options are clearly mispriced. Which ones? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) | ||||||||||||
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c-2. | What is the arbitrage profit you could make on each of the mispriced options? (Round your answers to 2 decimal places, e.g., 32.16.) |
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