1. Option Function: a. What happens if a long call is exercised? Explain. b. What happens if a long put is exercised? Explain. c. What happens if a short call is exercised? Explain. d. What happens if a short put is exercised? Explain. 2. Intrinsic and Extrinsic Value: Look at the following table and compute intrinsic and extrinsic values: UNDERLYING PRICE OPTION PRICE INTRINSIC EXTRINSIC VALLE VALLE Acadia Pharma (ACAD) $26.80 18 Apr 2019 25 call S3.20 Netflix Inc. (NFLX) $360,31 17 May 2019 380 put $35.85 Proctor & Gamble Co. $98.975 Apr 2019 95 call $4.85 (PG) IBM (IBM) S138.125 Apr 2019 137 put Pure Storage Inc. (PSTG) $20.50 17 May 2019 22.5 call $1.05 ZScaler, Inc (ZS) $49.68 20 Dec 2019 50 call $9.70 ZScaler, Inc (ZS) S49.68 20 Dec 2019 50 put $9.80 S2.19 3.1 Delta: a. An option is trading at $3.45. If it has a delta of 78, what would the price of the option be if the underlying increases by $.75? What would the price of the option be if the underlying decreases by S.55? b. What type of option is this? Explain your answer. c. With a delta of 78, is this option ITM, ATM or OTM? Explain your answer. 3.2 Delta: a. An option is trading at $5.03. If it has a delta of -56, what would the price of the option be if the underlying increases by $.75? What would the price of the option be if the underlying decreases by S.55? b. What type of option is this? Explain your answer. c. With a delta of - 56, is this option ITM, ATM or OTM? Explain your answer. 3.3 Delta: Look at the following chart. Rank the options in terms of moneyness, from deepest ITM to deepest OTM. Oy Dale A Call 89 Call .12 C -75 D Call .16 E Call .35 F Put 50