Chapter 03 · Section 3.1

Premium

Time to Expiration and Volatility of the Underlying Asset Look at the following two options:

                     Option A          Option B   
 
Option type:         American Call     American Call  
Exercise price:      $ 290             $ 290         
Underlying asset:    stock A           stock A        
Price of stock A:    $ 300             $ 300          
Expiration date:     June              September     
Today's date:        February          February  

a) no
b) yes

(Click here for help)