Question: NOTE: the green portion should be 6 instead of 9. ITIC LAVIC ULIOW SHOWS uc uala Tchaung 10 WU can prons. LU Beta Price Expiry

NOTE: the green portion should be 6 instead of 9. ITIC

NOTE: the green portion should be 6 instead of 9.

ITIC LAVIC ULIOW SHOWS uc uala Tchaung 10 WU can prons. LU Beta Price Expiry (Months) Exercise Price Stock Price AYE Call 1.2 $6 $30 $35 PIE Call 1.4 $6 9 $30 $35 The AYE call expiring in 6 months is correctly priced. Appraise whether the PIE call expiring in 6 months is consistently priced in relation to the AYE call expiring in 6 months. If there is insufficient information available to determine the consistency in the pricing of the calls, give your reasons. (10 marks)

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