$---- \text {Call} ---$ $\quad$ $\quad$ $-----\text { Put }-----$

question 56

Multiple Choice

$---- \text {Call} ---$ $\quad$ $\quad$$-----\text { Put }-----$
$\begin{array}{lllllll}\text { Option/Strike Exp.}&&&\text { Vol. }&\text { Last} &\text {Vol.}&\text { Last.}\\\text { XYZ} \\385 / 8 & 25 & \text { Dec. } & -- & --- & 100 & 1 / 8 \\385 / 8 & 30 & \text { Nov. } & 250 & 8\quad3/4 & 464 & 1 / 16 \\ 385 / 8 & 30 & \text { Dec. } & --- & --- & 572 & 5 / 16 \\385 / 8 & 35 & \text { Nov. } & 154 & 4\quad1 / 2 & 1748 & 5 / 16 \\385 / 8 & 35 & \text { Dec. } & 923 & 5\quad1 / 4 & 580 & 1\quad3 / 16 \\385 / 8 & 35 & \text { Mar. } & -- & --- & 33 & 2\quad5 / 8 \\385 / 8 & 40 & \text { Nov. } & 2023 & 1\quad1 / 8 & 530 & 2\quad3 / 8\end{array}$


-The closest quote for the Dec. 25 call, were it to trade, would be

• A) 12. Solution: Intrinsic value =38 5/8 - 25
• B) 4 7/8. =13 5/8
• C) 10 1/2.
• D) 13 5/8.

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Definitions:

Aggressively Seeking

Involves actively and intensely pursuing a specific goal or outcome, often in a competitive context.

Special Order

An order for goods or services that is outside the company's standard offerings, often requiring custom pricing and production considerations.

Minimum Price

The lowest price at which a product or service can be sold, often determined by costs, competition, or regulation.

Variable Manufacturing Cost

A cost that varies with the level of output production which includes direct materials, direct labor, and variable manufacturing overhead.