The following four (4) problems are based on the following information:

AMZN closed at $1,162.35 on 2017.12.01. A 2018.03.16 call option with a strike price of $1,000 sells for $182.30.

1. What is the intrinsic value of this option?

2. What is the time value of this option?

3. Your fancy computer estimates the volatility of AMZN as = 20.00 % and the risk free rate is r = 3.00 %. Given this information, what is the Black-Scholes value of this option? Feel free to use Excel or R to answer this problem.

4. Given the Black-Scholes value obtained in the previous problem, would you enter a long (buy) or short (sell/write) position in this option?