Explain carefully why the March calls are trading at higher prices than the December calls.

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter6: Fixed-income Securities: Characteristics And Valuation
Section: Chapter Questions
Problem 4QTD
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The data of the listed company is attached as a screenshot.

Ques) Explain carefully why the March calls are trading at higher prices than the December calls.

You are given the following data for a listed company as follows:
Options Traded on Legal and General
Share Price Exercise Price
Calls
Sep
Dec
Mar
65.90
64
4.50
7.75
9.75
68
3.50
5.75
7.75
Sep
3.50
5.75
Puts
Dec
6.75
8.75
Mar
8.75
10.75
Transcribed Image Text:You are given the following data for a listed company as follows: Options Traded on Legal and General Share Price Exercise Price Calls Sep Dec Mar 65.90 64 4.50 7.75 9.75 68 3.50 5.75 7.75 Sep 3.50 5.75 Puts Dec 6.75 8.75 Mar 8.75 10.75
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