• You are given the following information concerning options on a particular stock:
• Stock price = $81
• Exercise price = $65
• Risk-free rate = 5% per year, compounded continuously
• Maturity = 8 months
• Standard deviation = 60% per year
• What is the intrinsic value of the call option?

Answer rating: 100% (QA)

The intrinsic value of a call option is calculated as the difference betw... View the full answer