Can we say that the option of company a is overvalued

Reference no: EM131315717

Examine the data in the table below.

Given that both stocks trade for $50 and both options have a $45 strike price and a July expiration date, can we say that the option of Company A is overvalued or that the option of Company B is undervalued? Why or why not?

Company	Stock Price	Expiration	Strike Price	Call Price
A	$ 50	July	$ 45	$ 7.50
B	50	July	45	6.75

Reference no: EM131315717

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