Show me the steps to solve... 1. June CME stocks are trading at $ 82.5 and the June CME call option is trading at $ 3.5 with the strike price of $ 80. What is the intrinsic value? 2. What are the intrinsic value and time value of a CME put with the strike price of $95, if the underlying asset is trading at $94.98 and the option premium is $0.03 ?

Show me the steps to solve... 1. June CME stocks are trading at $ 82.5 and the June CME call option is trading at $ 3.5 with the strike price of $ 80. What is the intrinsic value? 2. What are the intrinsic value and time value of a CME put with the strike price of $95, if the underlying asset is trading at $94.98 and the option premium is $0.03 ?

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter5: Financial Options

Section: Chapter Questions

Problem 5MC: In 1973, Fischer Black and Myron Scholes developed the Black-Scholes option pricing model...

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In follow an Ito process with >0, a stock is worth $80 today, if the price of an option that pays the holder $2 exactly the first time the stock price reaches $200, what is the price of an option? Show all calculation.
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