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Decompose the option premiums for each strike price into intrinsic values and time values (formulas for puts and calls are provided in the lecture notes).
Decompose the option premiums for each strike price into intrinsic values and time values (formulas for puts and calls are provided in the lecture notes). Then create three charts that depict the option premiums, intrinsic values, and time values where the strike prices are listed on the horizontal axis (the charts should be similar to the charts provided). Ensure that the chart is correctly titled, axes are correctly titled, and each chart has a professional appearance.
2016 Dec Lean Hog Option Premiums HE216 Price = 47.125 (11/11/16) $16 14 E $12 $10 58 $6 $4 $2 so Call Premium 532 $34 $36 $38 $40 $42 $44 $46 $48 $5o $52 $54 $56 $58 $60 Strike Price Intrisic Value of HEZ16 Options (11/11/16) $16 $14 $12 $10 $8 S6 $4 $2 S0 -Put IV Strike Price Time Value of HEZ16 Options (11/11/16) $2.00 $1.80 $1.60 1.40 1.20 $1.00 $0.80 Put TV S0.40 $0.20 0.00 Strike Price 2016 Dec Lean Hog Option Premiums HE216 Price = 47.125 (11/11/16) $16 14 E $12 $10 58 $6 $4 $2 so Call Premium 532 $34 $36 $38 $40 $42 $44 $46 $48 $5o $52 $54 $56 $58 $60 Strike Price Intrisic Value of HEZ16 Options (11/11/16) $16 $14 $12 $10 $8 S6 $4 $2 S0 -Put IV Strike Price Time Value of HEZ16 Options (11/11/16) $2.00 $1.80 $1.60 1.40 1.20 $1.00 $0.80 Put TV S0.40 $0.20 0.00 Strike PriceStep by Step Solution
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