Table 1: Table for questions 2 to 4. The price per ounce of options on gold at 18:59:36 on 8/26/11.

Strike	Call	Put
1820	85.20	107.80
1825	83.20	110.90
1830	81.30	113.90
1835	79.40	1.71

Refer to Table 1. The table has prices per ounce on European options on gold. At that time, the market price of gold was $1,830 per ounce.

Can you spot the mispriced option in Table 1? Assuming the risk free rate is 1% and the time to expiration is 25 days (on a 365-day year), what is the lower-bound on the price of this option?

a.$1,835

b.$1,830

c.none of the answers are correct

d.$1,83375

Refer to Table 1. The table has prices per ounce on European options on gold. At that time, the market price of gold was $1,830 per ounce.

If you exercise the call in Table 1 with a strike price of $1,820, what is your payoff?

a.-$10

b.$0

c.$10

d. -$85.20

Using the information given in Table 1, calculate the appropriate price of the mis-priced option.

Refer to Table 1. The table has prices per ounce on European options on gold. At that time, the market price of gold was $1,830 per ounce.

a.$83.37

b.$183.37

c.$183

d. $83.15