A Long$-$term Equity AnticiPation Security $($LEAPS$)$ to buy stock at $$24$ expires after one year and currently sells for $$5.$ The underlying stock is selling for $$25.$

a$.$ What is the intrinsic value and the time premium paid for the LEAPS? If the answer is zero, enter $"0".$ Round your answer to the nearest dollar.

Intrinsic value: $

Time premium: $

nearest dollar.

Price of the stock Value of the LEAP at expiration

answers to one decimal place.

Return in the stock:

$\%$

Return in the LEAPS:

$\%$

Does the option in this problem illustrate the successful use of financial leverage?

This is an example of

$|$ use of financial leverage because the option rose by the $|$

$]$ amount than the stock rose.