Use the option quote information shown here to answer the questions that follow. The stock is...

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Finance

Use the option quote information shown here to answer thequestions that follow. The stock is currently selling for $85.

                                                                                 Calls                                       Puts

Option             Expiration         StrikePrice      Volume           Last                 Volume           Last

RWJ                March             80                   230                 2.80                 160                 0.80

                       April               80                   170                 6.00                 127                 1.40

                       July                 80                   139                8.50                 43                   3.90

                       October           80                   60                   10.20               11                   3.65

A) Are the call options in the money? What is the intrinsicvalue of an RWJ Corporation call option?

B) Are the put options in the money? What is the intrinsic valueof an RWJ Corporation put option?

C) Two of the options are clearly mispriced. Which ones? At aminimum, what should the mispriced options sell for? Explain howyou could profit from the mispricing in each case.

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Use the option quote information shown here to answer thequestions that follow. The stock is currently selling for $85.                                                                                 Calls                                       PutsOption             Expiration         StrikePrice      Volume           Last                 Volume           LastRWJ                March             80                   230                 2.80                 160                 0.80                       April               80                   170                 6.00                 127                 1.40                       July                 80                   139                8.50                 43                   3.90                       October           80                   60                   10.20               11                   3.65A) Are the call options in the money? What is the intrinsicvalue of an RWJ Corporation call option?B) Are the put options in the money? What is the intrinsic valueof an RWJ Corporation put option?C) Two of the options are clearly mispriced. Which ones? At aminimum, what should the mispriced options sell for? Explain howyou could profit from the mispricing in each case.

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