About the valuation-options

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Valuation-options

The following information refers to six-month call option on the stock of XYZ, Inc.

Price of the underlying stock: $50

Stike price of the three-month call: $45

Market price of the option: $10

a) What is the intrinsic value of the option?

b) What is the option's time premium at this price?

Reference no: EM13894213

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