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The price of a stock is $36. You can buy a six-month call option with $33...

The price of a stock is $36. You can buy a six-month call option with $33 exercise price for $3.2 or a six-month put option with $33 exercise price for $1.2.

(a) What is the intrinsic value of the call option?

(b) What is the intrinsic value of the put option?

(c) What is the time premium paid for the call option?

(d) What is the time premium paid for the put option?

(e) If the price of the stock rises, what happens to the value of the put?

(f) What is the maximum you could lose by selling the call covered?

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jeff jeffy answered 1 year ago
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