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Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $68. Calls Puts Strike Option Expiration
Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $68. |
Calls | Puts | ||||||||||||||||
Strike | |||||||||||||||||
Option | Expiration | Price | Vol. | Last | Vol. | Last | |||||||||||
RWJ | Mar | 63 | 238 | 4.00 | 168 | 4.10 | |||||||||||
Apr | 63 | 178 | 9.85 | 135 | 8.85 | ||||||||||||
Jul | 63 | 147 | 10.70 | 51 | 12.05 | ||||||||||||
Oct | 63 | 68 | 11.60 | 19 | 11.25 | ||||||||||||
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? |
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? |
Intrinsic value | $ |
c-1 | Two of the options are clearly mispriced. Which ones? | ||||||||||||
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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.) |
Mispriced option | Profit | ||||||||||||||||
(Click to select)Jul callOct callApr callMar call | $ | ||||||||||||||||
(Click to select)Jul putApr putMar putOct put | $ | ||||||||||||||||
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