In each of the following questions, you are asked to compare two options with parameters as given. The risk-free interest rate for all cases should be assumed to be
a.
Put | T | X | 0 | Price of Put |
A |
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B |
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Which put option is written on the stock with the lower price?
(1) A
(2) B
(3) Not enough information
b.
Put | T | X | 0 | Price of Put |
A |
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B |
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Which put option must be written on the stock with the lower price?
(1) A
(2) B
(3) Not enough information
c.
Put | T | X | 0 | Price of Put |
A |
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B |
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Which call option must have the lower time to expiration?
(1) A
(2) B
(3) Not enough information
d.
Call | T | X | 0 | Price of Call |
A |
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B |
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Which call option is written on the stock with higher volatility?
(1) A
(2) B
(3) Not enough information
e.
Call | T | X | 0 | Price of Call |
A |
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|
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|
B |
|
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Which call option is written on the stock with higher volatility?
(1) A
(2) B
(3) Net enough information

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Chapter 16 Solutions
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