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a. Calculate the intrinsic value for each of the following call options. (Round your answers to 2 decimal places.) Time to Expiration (months) 1 Intrinsic

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a. Calculate the intrinsic value for each of the following call options. (Round your answers to 2 decimal places.) Time to Expiration (months) 1 Intrinsic Value Company RJay RJay Sell-Mart Xenon 2 Strike 60 70 60 7.50 So 63.02 63.02 63.80 6.98 5 6 b. Now assume that the effective annual interest rate is 6.94%, which corresponds to a monthly interest rate of 0.56%. Calculate the present value of each call option's exercise price and the adjusted intrinsic value for each call option. (Round your answers to 2 decimal places.) Adjusted Intrinsic Value PV(X) Company RJay RJay Sell-Mart Xenon Time to Expiration (months) 1 2 5 6 Strike 60 70 60 7.50 So 63.02 63.02 63.80 6.98

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