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The following tables presents the data on ABC Corp.'s call options at different stock prices. Based on your understanding of exercise value and option prices,

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The following tables presents the data on ABC Corp.'s call options at different stock prices. Based on your understanding of exercise value and option prices, complete the table with a strike price of $20.00: Exercise Value Value Stock Price Strike Price Market Price of Option ($) 21.56 62.10 82.40 92.60 104.00 Time Value 40.00 80.00 100.00 110.00 120.00 20.00 20.00 20.00 20.00 20.00 20.00 2.10 2.40 90.00 4.00 After two weeks, the stock price of ABC Corp. increases to $132.00. Suppose you purchased the shares for $80.00 and then sell the shares at $132.00; your rate of return will be on that transaction After your analysis, you decided to purchase the option for $62.10, which gives you the right to buy ABC Corp.'s stock at $20.00. If you exercise the option by purchasing the stock at the strike price, you could immediately sell the share of the stock at its market price of $132.00. This will result in a payoff, and the rate of return on your option will be Answer the following questions, based on your understanding of options, option price, and exercise value True or False: An option's price wil always be greater than (or equal to) its exercise value This statement is True or False: Corporations on whose stocks options are traded in the option market are directly involved in the process, and it helps them raise additional funds This statement is True or False: If you hold a put option and the current stock price is more than the exercise price, you would lose money by exercising the option; therefore, rather than exercising it, you'd just let the option expire This statement is

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