A call option has a strike price of X = $100 and a time to expiration of 9 months. The risk free rate is r = 2.5% and the volatility is sigma = .15. If S = 102.50, th Black Scholes Model gives a call option price of C=$7.66.

1. The intrinsic value is $2.50
2. The time premium is $5.16
3. The call option is in the money

Which option is correct?

a. 1 & 2

b. 2 &3

c. 1, 2, & 3

d. 3

e.1