Calculate the intrinsic value for each of the following call options. Company Time to expiration (months) Strike
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Question:
Calculate the intrinsic value for each of the following call options.
Company | Time to expiration (months) | Strike | S(0) | Intrinsic value |
RJay | 1 | 60 | 63.02 | |
RJay | 2 | 70 | 63.02 | |
Sell-Mart | 5 | 60 | 3.80 | |
Xenon | 6 | 7.50 | 6.98 |
b) Now assume that the effective annual interest rate is 6.94%, which corresponds to a monthly interest rate of 0.56%. Calculate the present value of each call option?
Company | Time to expiration (months) | Strike | S(0) | PV(x) | Adjsted Intrinsic value |
RJay | 1 | 60 | 63.02 | ||
RJay | 2 | 70 | 63.02 | ||
Sell-Mart | 5 | 60 | 63.80 | ||
Xenon | 6 | 7.50 | 6.98 |
Related Book For
Engineering Economic Analysis
ISBN: 9780195168075
9th Edition
Authors: Donald Newnan, Ted Eschanbach, Jerome Lavelle
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