You are given the following information concerning options on a particular stock: Stock price = $ 3
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Question:
You are given the following information concerning options on a particular stock:
Stock price
$
Exercise price
$
Riskfree rate
per year, compounded continuously
Maturity
months
Standard deviation
per year
aWhat is the intrinsic value of the call option? Please keep two digits after the decimal point.
Intrinsic value$
bWhat is the time premium of the call option? Please keep two digits after the decimal point.
Time premium of the call option$
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