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You are given the following information concerning options on a particular stock: Stock price = $ 3 5 Exercise price = $ 4 1 Risk

You are given the following information concerning options on a particular stock:
Stock price=
$35
Exercise price=
$41
Risk-free rate=
3% per year, compounded continuously
Maturity=
7 months
Standard deviation=
21% per year
(a)What is the intrinsic value of the call option? (Please keep two digits after the decimal point.)
Intrinsic value=$
(b)What is the time premium of the call option? (Please keep two digits after the decimal point.)
Time premium of the call option=$

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