Chapter 03 · Section 3.1

Costs of Calls and puts

You are reading the Wall Street Journal and you see the following table:

                    C A L L                          P U T         
 Exercise   M a r    J u n     S e p        M a r    J u n   S e p 
 Price                                                             
 30         10.15    10.85     11.65         0.05     0.35    0.85 
 35          5.40     6.90      8.10         0.25     1.35    2.15 
 40          1.90     4.00      5.35         1.75     3.40    4.35 
 45          0.40     2.10      3.45         5.30     6.50    7.40 
 50          0.05     1.05      2.15        10.05    10.50   11.15 
                Stock price: $40    Today's date: February         

If you want to acquire the right to buy the underlying asset at $45 within 1 month, how much would that cost you per share?

a) $5.30
b) $40.00
c) $45.00
d) $5.40
e) $0.40