Question
Given the following information, price of a stock $39 strike price of a six-month call $35 market price of the call $ 8 strike price
Given the following information, price of a stock $39 strike price of a six-month call $35 market price of the call $ 8 strike price of a six-month put $40 market price of the put $ 3 finish the following sentences. a. The intrinsic value of the call is _________. b. The intrinsic value of the put is _________. c. The time premium paid for the call is _________. d. The time premium paid for the put is _________. At the expiration of the options (i.e., after six months have lapsed), the price of the stock is $45. e. The profit (loss) from buying the call is _________. f. The profit (loss) from writing the call covered (i.e., buying the stock and selling the call) is _________. g. The profit (loss) from buying the put is _________. h. The profit (loss) from selling the stock short is _________. i. The maximum possible loss from buying the put is _________. j. At expiration, the time premium paid for a put or a call is _________.
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