Listed Below Are the Option Quotes on JUP, Inc (A) Which Calls Are in the Money?
(B) Which Puts

question 1

Essay

Listed below are the option quotes on JUP, Inc., in January of this year.
$\begin{array}{llllll}\text { Options/Strike } & \text { March } & \text { June } & \text { March } & \text { June } \\\text { JUP } \quad 35 & 3\quad1 / 2 & 4 & 1 / 2 & 1\quad1 / 8 \\37 \quad 40 & 1\quad1 / 2 & 2 & 4\quad1 / 2 & 5 \\37 \quad 45 & 1 & 1\quad1 / 2 & 8\quad3 / 8 & \mathrm{~s} \\37 \quad 50 & 1 / 2 & \mathrm{r} & \mathrm{r} & \mathrm{s}\end{array}$


(a) Which calls are in the money?
(b) Which puts are in the money?
(c) Why are investors willing to pay 3 1/2 for the MARCH 35 call but only 1/2 for the March 35 put?
(d) Calculate the intrinsic value of the June 35 call.
(e) Calculate the intrinsic value of the March 40 put.

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Definitions:

Equal Payments

Regular payments of the same amount over a specified period.

Interest Earned

The profit gained from investing or saving, typically represented as a percentage of the original investment.

Compounded Quarterly

Interest calculation method where interest is added to the principal sum of a deposit or loan every quarter, influencing the amount in the next quarter.

Promissory Note

A monetary contract where one party commits to paying a distinct sum to another party, either on call or at a set date ahead.