Question: he value derived from exercising an option immediately is the exercise value. No rational investor would exercise an ption that is out-of-the-money, so the minimum

he value derived from exercising an option immediately is the exercise value. No rational investor would exercise an ption that is out-of-the-money, so the minimum exercise value is zero. The following table provides information regarding options on ABC Corp. stock. Because the stock's price is volatile investors trade options to either hedge their positions or speculate on price movements. Investors can either buy options or "issue" new options, which is called writing options. The following tables presents the data on ABC Corp.'s call options at different stock prices. Based on your understanding of exercise value and option prices, complete the table with a strike price of $22.00: Market Price of Option (s) 19.56 60.10 80.40 90.60 102.00 Stock Price Strike Price Exercise Value Time Value 40.00 80.00 100.00 110.00 120.00 22.00 22.00 22.00 22.00 22.00 18.00 2.10 2.40 78.60 58.00 78.00 79.00 4.00

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