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Question
Listed below are the option quotes on JUP, Inc., in January of this year.-------Calls------- | --------Puts-------- | |||
Options/Strike | March | June | March | June |
JUP 35 | 3 1/2 | 4 | 2-Jan | 1 1/8 |
37 40 | 1 1/2 | 2 | 4 1/2 | 5 |
37 45 | 1 | 1 1/2 | 8 3/8 | s |
37 50 | 2-Jan | r | r | s |
(a) Which calls are in the money?
(b) Which puts are in the money?
(c) Why are investors willing to pay 3 1/2 for the MARCH 35 call but only 1/2 for the March 35 put?
(d) Calculate the intrinsic value of the June 35 call.
(e) Calculate the intrinsic value of the March 40 put.
Answer
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