You are given the following data on call and put premia in, Ask an Expert

Economics

You are given the following data on call and put premia in cents per share for company ABC's shares, currently priced at 425 cents each. Each contract refers to 1000 shares.

Call Premia Call Premia Call Premia Put Premia Put Premia Put Premia

Strike Prices April June September April June September

420 22 31 34 14 20 27

460 6 12 15 39 42 48

(a) List all the call and put premia that are `out of the money'.

(b) describe your intuition as to why the premia rise between April and September.

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M969580

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