Stock Exercise Intrinsic Time Option Premium Maturity Type of Option Price Price Value Value A $50...

 

Transcribed Image Text:

Stock Exercise Intrinsic Time Option Premium Maturity Type of Option Price Price Value Value A $50 $45 ? ? $7.25 3 months Call BCD $50 $25 $0 ? $2.89 3 months ? $50 $45 $0 ? $8.59 6 months ? $50 $25 $25 ? $31.54 6 months ? Based on the table, choose the correct statements. Option-A's intrinsic value is $0. The only put option is B. Option-D should have the highest time value since it has a longer maturity and is deeper in-the-money. Options B and C are put. Option-C should have the highest time value since it has a longer maturity and is closer to at-the-money. Option-A's intrinsic value is $5. Stock Exercise Intrinsic Time Option Premium Maturity Type of Option Price Price Value Value A $50 $45 ? ? $7.25 3 months Call BCD $50 $25 $0 ? $2.89 3 months ? $50 $45 $0 ? $8.59 6 months ? $50 $25 $25 ? $31.54 6 months ? Based on the table, choose the correct statements. Option-A's intrinsic value is $0. The only put option is B. Option-D should have the highest time value since it has a longer maturity and is deeper in-the-money. Options B and C are put. Option-C should have the highest time value since it has a longer maturity and is closer to at-the-money. Option-A's intrinsic value is $5.

Answer rating: 100% (QA)

Lets analyze each statement based on the given table 1 OptionAs intrinsic value is 0 True Intrinsic value is calculated as the difference between the stock price and the exercise price For OptionA the ... View the full answer