Which is likely to have the lowest price

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Question - A stock is currently selling at RM10.00. An at-the money call option with 30 days to maturity is being quoted RM0.90. Assume there are four other 30 day options on the stock. These are a RM9.00 put option, RM9.00 call option and a RM12.00 call and put option.

1. Of the five available options, which is likely the highest price? Which is likely to have the lowest price?

2. Which option(s) will gain in valuer if the underlying stock rises to RM11.00? Rank by order of likely increase.

3. Which option(s) will gain in value if the underlying stock goes to RM8.00? Rank by order of likely increase.

Reference no: EM133049906

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