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5. (10 pts.) Using the Black-Scholes model find the premium on a call option with an exercise price of $35 on a share currently priced

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5. (10 pts.) Using the Black-Scholes model find the premium on a call option with an exercise price of $35 on a share currently priced at $40. Assume the riskless rate of 1% per annum and the option has nine-months to expiration. The risk of the stock is measured by a o value of 0.125. Decompose the premium into intrinsic value and time value

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