Calculate the theoretical intrinsic value of the call option

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Given the following information, calculate the theoretical intrinsic value of the Call option using the Black Scholes Model. IF the market price for the Call option = $11, should the investor buy? S = 14 = Stock Price X = 16 = Exercise or Strike Price r = 0.05 = Risk Free Rate T = 0.25 = Time to Maturity (as a fraction of one year) N(d1) = 0.1469 N(d2) = 0.1230

Reference no: EM131129861

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