Use the following option quotes to answer questions 1 through 6.
Call Put
Option Strike Exp. Vol. Last Vol. Last
Cisco 15.00 Oct. 491 2.26 559 0.25
16.30 15.00 Nov. 259 2.90 154 1.00
16.30 17.50 Oct. 680 0.85 522 1.60
16.30 17.50 Nov. 142 1.33 40 2.31
16.30 17.50 Feb. 51 1.95 28 3.77
16.30 20.00 Oct. 828 0.30 915 4.05
16.30 20.00 Nov. 123 0.55 212 4.67
1. What is the cost to purchase one October 17.50 call contract on Cisco stock?
a. $290
b. $175
c. $ 85
d. $163
e. $680
2. What is the time value per share of the November 15 call?
a. $1.30
b. $1.40
c. $1.60
d. $1.90
e. $2.90
3. What is the time value per share of the November 15 put?
a. $0.00
b. $0.25
c. $1.00
d. $1.25
e. $1.30
4. Which of the options shown in the quote are in-the-money?
I. The October 15 call
II. The November 17.50 call
III. The October 15 put
IV. The November 20 put
a. I and II only
b. II and III only
c. I and IV only
d. III only
e. III and IV only
5. Suppose you bought 20 Cisco Oct 15 call contracts. Just before the option expires, the stock is selling for $18. What is your net profit (or loss)? Ignore transaction costs.
a. $4,520
b. $2,260
c. $ 0
d. $1,480
e. $6,000
6. Suppose you bought 10 Cisco Oct 20 put contracts. Just before the option expires, the stock is selling for $19. What is your net profit (or loss)? Ignore transaction costs.
a. $4,050
b. $3,050
c. $1,000
d. $1,000
e. $3,700