The value derived from exercising an option immediately is the exercise value. No rational investor would exercise an option that is out-of-the-money, so the minimum exercise value is zero. The following table provides information regarding options on ABC Corp. stock. Because the stock's price is volatile, investors trade options to either hedge their positions or speculate on price movements, Investors can either bur options or "issue" new options, which is called writing options. The following table presents the data on ABC Corpis call options at different stock prices, Based on your understanding of exercise value and option prices, compiete the table with a strike price of $22.00 : After two woeks, the stock price of ABC Corp. increases to $26,40. Suppose you purchased the stores for $16,00 and then sell the shares at $26.40; your rate of return was be on that transaction. After your analysis, you decided to purchase the option for $2.10, which gives you the right to buy ABC Corp, stock at $22.00. If you exercise the option by purchasing the stock at the strike price, you colid immedlately seli the share of the stock at its market price of 5226.40 , This will result in a payolf, and the rate of return on your option will be Answer the following questions, based on your understanding of options, option price, and exercisit value: - True or False: An option's price will always be greater than (or equal to) its exercise value. - True or False: When you buy a call option, you are obliged to buy the underlying asset at the strike price by the expiration date. - True or False: If you hold o put option and the current stock price is more than the exercise price, you would lose money by exercising trie option; therefore, rather than exercising it, you'd just let the option expire