You are given the following information concerning options on a particular stock: Stock price= Exercise price= Risk-free rate= Maturity= Standard deviation= Intrinsic value=$ $83 $80 Time premium of the call option=$ 6% per year, compounded continuously 6 months (a)What is the intrinsic value of the call option? (Please keep two digits after the decimal point.) 47% per year (b)What is the time premium of the call option? (Please keep two digits after the decimal point.)
You are given the following information concerning options on a particular stock: Stock price= Exercise price= Risk-free rate= Maturity= Standard deviation= Intrinsic value=$ $83 $80 Time premium of the call option=$ 6% per year, compounded continuously 6 months (a)What is the intrinsic value of the call option? (Please keep two digits after the decimal point.) 47% per year (b)What is the time premium of the call option? (Please keep two digits after the decimal point.)
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 3Q
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