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A put option has an exercise price of $40 and the call premium is $5. The current market price of the underlying stock is $38.
A put option has an exercise price of $40 and the call premium is $5. The current market price of the underlying stock is $38.
A. Is the option in the money or out of the money?
B. What is the intrinsic value of the option? The time value?
C. What is the break-even stock price on the options expiration date?
D. If you purchase this option, what is your maximum possible gain?
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