Question

Use the option quote information shown here to answer the questions that follow. The stock is currently selling for $62.

						Calls						Puts
				Strike
Option	Expiration			Price		Vol.			Last			Vol.			Last
RWJ		Mar		56			232			3.40			162			3.50
		Apr		56			172			9.25			129			8.25
		Jul		56			141			10.10			45			11.15
		Oct		56			62			11.00			13			10.65

c-1 Two of the options are clearly mispriced. Which ones? Mar call Apr call Oct call Mar put Oct put Apr put    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) Mar call Jul call Oct call Apr call $      (Click to select) Oct put Jul put Mar put Apr put $

Answer 1