Solution-Calculate the intrinsic value-time value

Calculate the intrinsic value-time value

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Reference no: EM132711551

George bought a 6-month naked put option on XYZ with a strike of $50 and the shares are trading at $48.50, the price of the option was $4.25.

a) Calculate the intrinsic value

b) Calculate the time value.

c) At what price would the shares have to trade for George would start to make money?

Reference no: EM132711551

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