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You are given the following information concerning options on a particular stock: Stock Price $42 Exercise Price $40 Risk free rate 7% per year, compounded

You are given the following information concerning options on a particular stock:

Stock Price $42

Exercise Price $40

Risk free rate 7% per year, compounded continuously

Maturity 6 months

Standard Deviation 40% per year

What is the intrinsic value of each option? (Call option, Put option)

What is the time value of each option? (Call option, Put option)

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