Look at actual trading prices of call options on stocks to check whether they behave as the theory presented in this chapter predicts. For example,
a. Follow several options as they approach maturity. How would you expect their prices to behave? Do they actually behave that way?
b. Compare two call options written on the same stock with the same maturity but different exercise prices.
c. Compare two call options written on the same stock with the same exercise price but different maturities.

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Option value refers to the value that is placed with private willingness in order to pay for the mai... View the full answer