1. Consider a call option for the Intel stock with the exercise price of $20. Today is the expiration date. If the stock price is $21.50 today, what is the current value of the option?

2. Consider a put option for the Intel stock. The exercise price of the option is $20. If the stock price is $21.50 today, the expiration date, what is the current value of the option?

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3. Suppose that you bought the Intel stock at $21.50 per share, and that you paid $2 to buy its put option with the strike price of $20. It the stock price is $30 on the expiration date, what is the total profit per share from the investment?

4. ABC Company recently issued two types of bonds. The first issue consisted of 20-year straight debt with an 8 percent annual coupon. The second issue consisted of 20-year bonds with a 6 percent annual coupon and attached warrants. Both issues sold at their $1,000 par values. What is the implied value of the warrants attached to each bond?

5. Consider a company’s 15 year, 9% coupon convertible bond with a $1,000 par value and the conversion ratio of 40. Its current price is $950, and its equivalent regular coupon bond yields 12%. These bonds are annual bonds. What is the value of the call option embedded in the convertible bond?

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1. Consider a call option for the Intel stock with the exercise price of $20. Today is the expiration date. If the stock price is $21.50 today, what is the current value of the option?