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Brighton Memory’s stock is currently trading at $50 a share. A calloption on the stock with a $35 strike price currently sells for $21.What is the exercise value of the call option? ($15.00) What is thetime value? ($6.00)

Brighton Memory’s stock is currently trading at $50 a share. A calloption on the stock with a $35 strike price currently sells for $21.What is the exercise value of the call option? ($15.00) What is thetime value? ($6.00)

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Brighton Memory’s stock is currently trading at $50 a share. A call
option on the stock with a $35 strike price currently sells for $21.
What is the exercise value of the call option? ($15.00) What is the
time value? ($6.00)

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