Comment on the moneyness of the put option

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Consider an American put option on a stock when the stock is trading for $38 and the strike price is $40. The risk-free rate of interest is 4% and the option matures in 5 months. The put premium is currently trading for $2.15

a) What is the intrinsic value?

b) What is the time value?

c) Comment on the moneyness of the put option

Reference no: EM131962556

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