1. A call option with 3 months remaining to maturity on an underlyingstock with no additional cash flows has an exercise price (X) of 50. Risk-free rate is 2%, and the stock is currently trading at 57.50. A call option on the stock can be purchased for 10. What is the exercise value and the time value of the option?

Answer rating: 100% (QA)

To calculate the exercise value of the call option we need to determine if it ... View the full answer