Calculate the time value of the put option

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Questions -

Q1. Assume that the Japanese yen is trading at a spot price of 110.89 cents per 100 yen. Further assume that the premium of an American call option with a strike price of 110 is 2.22 cents. Calculate the intrinsic value of the call option.

Q2. Assume that the Japanese yen is trading at a spot price of 110.56 cents per 100 yen. Further assume that the premium of an American call option with a strike price of 110 is 2.22 cents. Calculate the time value of the call option.

Q3. Assume that the Japanese yen is trading at a spot price of 110.72 cents per 100 yen. Further assume that the premium of an American put option with a strike price of 110 is 2.22 cents. Calculate the intrinsic value of the put option.

Q4. Assume that the Japanese yen is trading at a spot price of 109.53 cents per 100 yen. Further assume that the premium of an American put option with a strike price of 110 is 2.20 cents. Calculate the time value of the put option.

Reference no: EM133015179

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