Question

THIS IS A TWO PART QUESTION. YOU MUST GET BOTH PARTS CORRECT TO EARN CREDIT Option Quotations for China Doll (CD) Corporation are listed as follows CALL. .PUT Closing..Strike... EXP...Premium...Premium 10.23.10 ...0.6700 11.00 11.25..Oct....0.70001.920 0.500. 10.23. 2311.50 "Closing" represents the closing price per share of CD on a particular trading day PART 1 Is the Sep Call in-the-money or out-of-the-money? PART 2: Is the Jun Put in-the-money or out-of-the-money? Jun.1.000...2.370 (answer with the word IN or the word OUT) (answer with the word IN or the word OUT)

Answer 1

Part 1:

As the strike price > closing price, the Sep Call option is OUT-of-the-money

Part 2:

As the strike price > closing price, the Jun Put option is IN-the-money