Chapter 03 · Section 3.1

Option pricing

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

Option A should be quoted at:

c) $10
Yes. At the expiration date, the premium equals the intrinsic value of the option. The time value component of the premium equals zero. Continue
d) $15

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