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:
a) $0
b) $5
c) $10
d) $15
Option A is at expiration.
At expiration, the premium has no time value and consists only of the option's intrinsic value.