Question
You are given the following information concerning options on a particular stock: Stock price= $83 Exercise price= $80 Risk-free rate= 6% per year, compounded continuously
You are given the following information concerning options on a particular stock:
Stock price= | $83 |
Exercise price= | $80 |
Risk-free rate= | 6% per year, compounded continuously |
Maturity= | 6 months |
Standard deviation= | 47% per year |
(a)What is the intrinsic value of the call option? (Please keep two digits after the decimal point.)
Intrinsic value=$
(b)What is the time value of the call option? (Please keep two digits after the decimal point.)
Call option value=$
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Public Finance In Theory And Practice
Authors: Richard Abel Musgrave, Peggy B. Muscrave
5th Edition
0070441278, 978-0070441279
