Question: Only the second question is needed Prices as shown on 14 Dec 2018 DRCB: Current spot price: $ 150 CALLS PUTS Dec Jan Feb Strike

Only the second question is needed Prices as shown on 14

Only the second question is needed

Prices as shown on 14 Dec 2018 DRCB: Current spot price: $ 150 CALLS PUTS Dec Jan Feb Strike Price Dec Dan Feb 8.85 1149 12.67 16.6 7.93 14.25 8.35 9.65 150 3.15 iz 8.38 2.97 7 7.95 1152 14.2 18.1 9.5 9.88 5.83 7.36 155 5.85 19.3 10.64 1. WHAT ARE THE FIVE FACTORS WHICH INFLUENCE PRICE OF AN OPTION? 2. Study the above table carefully. The table shows prices of options on DRCB company as quoted on the NASDAQ stock exchange on 14th December. Using your knowledge of option pricing theory, explain why the prices of different calls and puts are different from each other. (Diagrams are not required)

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