Use the following information on call and put options for Facebook to answer the questions.

a. What is the intrinsic value of the call option that expires in April and has a $17 strike price?

b. What is the intrinsic value of the put option that expires in January and has an $18 strike price?

c. Briefly explain why a call with an $18 strike price sells for less than a call with a $17 strike price (for all expiration dates), while a put with an $18 strike price sells for more than a put with a $17 strike price (for all expiration dates).

d. Suppose you buy the April call with a strike price of $18. If you exercise it when the price of Facebook is $25, what will be your profit or loss? (Remember that each options contract is for 100 shares of stock.)

e. Suppose you buy the April put with a strike price of $18 at the price listed, and the price of Facebook stock remains at $21.95. What will be your profit or loss?

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Facebook Underlying stock price: 21.95 Call Open Put Open Expiration Strike Last Volume Interest Last Volume Interest Oct 17.00 5.00 21 3064 0.02 13 14427 Nov 17.00 5.20 44 795 0.40 485 13098 Jan 17.00 5.50 1 691 0.55 231 7381 Apr 17.00 5.70 2 1409 1.15 69 7289 Oct 18.00 4.00 49 4762 0.07 154 22337 Nov 18.00 4.44 37 4047 0.50 4426 16197 Jan 18.00 4.50 10 943 0.80 409 13754 Apr 18.00 5.22 31 712 1.45 60 6659