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The following information refers to a six-month call option on the stock of XYZ, Inc. a. Price of the underlying stock: $100 b. Strike price

The following information refers to a six-month call option on the stock of XYZ, Inc.

a. Price of the underlying stock: $100

b. Strike price of the three-month call: $92

c. Market price of the option: $18

a) What is the intrinsic value of the option?

b) What is the option’s time premium at this price?

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