Problema particular call this the option to buy stock at 25, Ask an Expert

Finance

Problem:

A particular call this the option to buy stock at $25. It expires in six months and currently sells for four dollars when the price of the stock is $26.

Required:

Question 1: What is the intrinsic value of the call? What is the time premium pay for the call?

Question 2: What will the value of this call be after six months if the price of the stock is $20? $25? $30 $40?

Note: Please provide reasons to support your answer.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91149068

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