1. Suppose you believe that Basso Inc.'s stock price is going to increase from its current level of $19 sometime during the next 6 months. You can buy a 6-month call option giving you the right to buy 1 share at a price of $33 per share. If Basso's stock price actually rises to $67, what would the exercise value be?
2. Jim White and Jerry Green bet $25 on a New England Patriots football game. Jim wants to ensure that Jerry pays his bet, so before the game is played, he asks Jerry for a check that says "Pay to the order of Jim White if the New England Patriots win the football game played on November 10."
The New England Patriots win the game. Can Jim cash his check?