(b) Table 1. AP and BSF stock price with call and put options (May, Aug.Nov) Stock...

  

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(b) Table 1. AP and BSF stock price with call and put options (May, Aug.Nov) Stock Price Strike Price Call May Aug Nov Put May Aug Nov AP 40 12.50 13 a 0.05 0.70 1.50 521/2 45 7.75 8.65 10.50 0.20 1.75 3 521/2 50 3 5.85 7.85 1.15 3.75 5.25 521/2 60 0.25 2.45 4.15 8.65 9.90 10.40 521/2 70 0.05 0.85 b a 18.75 b 521/2 80 a 0.45 b a a b 521/2 90 a 0.10 b a a b BSF 15 10.75 11 10 0.05 a 25 3/8 20 5.50 6 7.50 0.05 0.40 25 3/8 25 1.45 3.35 4.50 0.75 1.65 2.15 253/8 30 0.20 1.50 1.50 4.50 A 6772A a a (i) (ii) (111) Using the following information, answer the following questions: The BSF May call option has a premium of 0.20. What is the strike price of this option? (1 mark) Determine whether BSF May 20 put option is at the money/out of money/in the money and justify your answer. Determine whether AP May 40 call option is at the money/out of money/in the money and justify your answer. (2 marks) (2 marks) (iv) What is the intrinsic value of the BSF August 20 call options? (2 marks) (v) What is the time value of the BSF August 20 call options? (2 marks) (b) Table 1. AP and BSF stock price with call and put options (May, Aug.Nov) Stock Price Strike Price Call May Aug Nov Put May Aug Nov AP 40 12.50 13 a 0.05 0.70 1.50 521/2 45 7.75 8.65 10.50 0.20 1.75 3 521/2 50 3 5.85 7.85 1.15 3.75 5.25 521/2 60 0.25 2.45 4.15 8.65 9.90 10.40 521/2 70 0.05 0.85 b a 18.75 b 521/2 80 a 0.45 b a a b 521/2 90 a 0.10 b a a b BSF 15 10.75 11 10 0.05 a 25 3/8 20 5.50 6 7.50 0.05 0.40 25 3/8 25 1.45 3.35 4.50 0.75 1.65 2.15 253/8 30 0.20 1.50 1.50 4.50 A 6772A a a (i) (ii) (111) Using the following information, answer the following questions: The BSF May call option has a premium of 0.20. What is the strike price of this option? (1 mark) Determine whether BSF May 20 put option is at the money/out of money/in the money and justify your answer. Determine whether AP May 40 call option is at the money/out of money/in the money and justify your answer. (2 marks) (2 marks) (iv) What is the intrinsic value of the BSF August 20 call options? (2 marks) (v) What is the time value of the BSF August 20 call options? (2 marks)