Question: how did they find the intrinsic values time value. How did they also find the call and put payoffs. Need help, it is to help
how did they find the intrinsic values time value. How did they also find the call and put payoffs. Need help, it is to help me study for a test.
| #4 | |||||
| Stock Price | 110 | ||||
| Strike Price | 109 | ||||
| Call Premium | 12 | ||||
| Put Premium | 14 | ||||
| Call Breakeven | 121 | ||||
| Put Breakeven | 95 | ||||
| Call is | In the money | ||||
| Put is | Out of money | ||||
| Call | Put | ||||
| Intrinsic Value | 1 | 0 | |||
| Time Value | 11 | 14 | |||
| Max loss | 12 | 14 | |||
| Max gain | Unlimited | 95 | |||
| Payoffs at different S1 | |||||
| S1 | 88.00 | 99.00 | 110.00 | 121.00 | 132.00 |
| Call payoff | -12.00 | -12.00 | -11.00 | 0.00 | 11.00 |
| Put payoff | 7.00 | -4.00 | -14.00 | -14.00 | -14.00 |
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