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You can buy a IBM call option exercise price 75 and expiration date June 2014 for a premium (option price) of $12 per option (sold

You can buy a IBM call option exercise price 75 and expiration date June 2014 for a premium (option price) of $12 per option (sold in groups of 100 so would buy 100 of them). If IBM stock is currently trading at $78:

a. Is this option: in the money, at the money or out of the money?

b. If IBM Stock is trading at 70....

i. What is the intrinsic value of this option?

ii. What is the time value?

iii. Would it make sense for you to exercise this option?

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