Question
In: Finance
A call option written on CBA has a strike price of $78 and trades at $3.42....
A call option written on CBA has a strike price of $78 and trades at $3.42. CBA share price is $81. The split up of option value into intrinsic value and time value is:
a)$3.00 intrinsic value and $0.42 time value
b)-$2.00 intrinsic value and $5.42 time value
c)$2.00 intrinsic value and $1.42 time value
d)zero intrinsic value and $3.42 time value
Solutions
Expert Solution
Intrinsic Value of Call Option = Stock Price - Strike Price
Intrinsic Value = 81 - 78 = $3
Time Value = Premium - Intrinsic value
Time Value = 3.42 - 3 = $0.42
$3.00 intrinsic value and $0.42 time value
jeff jeffy answered 2 years agoRelated Solutions
A call option written on CBA has a strike price of $78 and trades at $3.42....
A call option written on CBA has a strike price of $78 and
trades at $3.42. CBA share price is $81. The split up of option
value into intrinsic value and time value is:
$3.00 intrinsic value and $0.42 time value
-$2.00 intrinsic value and $5.42 time value
$2.00 intrinsic value and $1.42 time value
zero intrinsic value and $3.42 time value
A stock trades for $47 per share. A call option on that stock has a strike...
A stock trades for $47 per share. A call option on that stock
has a strike price of $53 and an expiration date six months in the
future. The volatility of the stock's returns is 32%, and the
risk-free rate is 5%. What is the Black and Scholes value of this
option? The Black and Scholes value of this call option is $
________. (Round to the nearest cent.)
A stock trades for $43 per share. A call option on that stock has a strike...
A stock trades for $43 per share. A call option on that stock
has a strike price of $51 and an expiration date six months in the
future. The volatility of the stock's returns is 48%, and the
risk-free rate is 66%. What is the Black and Scholes value of
this option?
A stock trades for $47 per share. A call option on that stock has a strike...
A stock trades for $47 per share. A call option on that stock
has a strike price of $51 and an expiration date three months in
the future. The volatility of the stock's returns is 35%, and the
risk-free rate is 2%. What is the Black and Scholes value of this
option?
A stock trades for $42 per share. A call option on that stock has a strike...
A stock trades for $42 per share. A call option on that stock
has a strike price of $54 and an expiration date nine months in the
future. The volatility of the stock's returns is 33%, and the
risk-free rate is 2%. What is the Black and Scholes value of this
option?
A stock trades for $46 per share. A call option on that stock has a strike...
A stock trades for
$46
per share. A call option on that stock has a strike price of
$54
and an expiration date
threethree
months in the future. The volatility of the stock's returns
is
37%,
and the risk-free rate is
6%.
What is the Black and Scholes value of this option?
A stock trades for $46 per share. A call option on that stock has a strike...
A stock trades for
$46
per share. A call option on that stock has a strike price of
$54
and an expiration date
three
months in the future. The volatility of the stock's returns
is
37%
and the risk-free rate is
6%.
What is the Black and Scholes value of this option?
Find the Black-Scholes price of a six-month call option written on €100,000 with a strike price...
Find the Black-Scholes price of a six-month call option written
on €100,000 with a strike price of $1.0000/€. The current exchange
rate is $1.125/€. The U.S. risk-free rate is 2 percent over the
period and the euro-zone risk-free rate is 1 percent. The
volatility of the underlying asset is 10.5 percent.
$0.1309/€
$0.1682/€
$0.1452/€
$0.0016/€
You are about to price a call option that has a strike price of $30 and...
You are about to price a call option that has a strike price of
$30 and has a maturity of 9-months. You know the current risk-free
rate for all periods up to a year is 4.95% with continuous
compounding, the current stock price is $28.75, and the stock’s
volatility is 25%. Use CRR approach for u & d when needed.
What is the value of this European put option using a 4-step
binomial tree?
1. Bluefish has a put option that trades with a strike price of $74. The put...
1. Bluefish has a put option that trades with a strike price of
$74. The put option premium is
$12. Determine the profit/loss on WRITING one
Bluefish put option if at the option's expiration the stock price
is $50.
2. Kingfish has call options trading with a strike price of
$77 and a premium of $10.
Determine the profit/loss to the buyer of the call option if at the
time of expiration the stock price is
$63.
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- “Triangle Guessing” game in Python The program accepts the lengths of three (3) sides of a...
- THIS PROGRAM HAS TO BE WRITTEN IN C Single function to perform the parity computation on...
- Consider a buffer system consisting of Benzoic acid (pKa = 4.20) and sodium benzoate, a) Would...
- Decision Variables S T Minimize 1.8S + 2.20T Subject to: Potassium 5S + 8T >= 200...
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
ADVERTISEMENT