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Assume that a call option on the UK pound has an exercise price of $1.50/ and a premium of $0.01. At a spot price of
Assume that a call option on the UK pound has an exercise price of $1.50/ and a premium of $0.01. At a spot price of $1.45/, the call option has:
a time value of $0.00, and an intrinsic value of $0.05
a time value of $0.01, and an intrinsic value of $0.00
a time value of $0.05, and an intrinsic value of -$0.04
a time value of $0.04, and an intrinsic value of $0.04
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