Compute the intrinsic value and the time value of option

Reference no: EM132063609

Question: A put option on Snapple Beverage has an exercise price of $30. The current stock price of Snapple Beverage is $34.25. The put option price is $7.75

a. Is this option at-the-money option, out-of-the-money option, or in-the-money option?

b. Compute the intrinsic value and the time value of this option.

Reference no: EM132063609

Questions Cloud

Strategy is preferable if you are moderately risk adverse : Which strategy is preferable if you are moderately risk adverse? Why?

Calculate the partnership ordinary income : AT Partnership is owned equally by Ashley and Travis. Long-term capital gain 30,000. Calculate the partnership's ordinary income

What was the amount of the deposit : You put $10,000 in an account earning 3%. After 4 years, you make another deposit into the same account. Six years later (10 years original deposit).

Describe the protective put : Describe the protective put. What are the advantages of such a strategy?

Compute the intrinsic value and the time value of option : A put option on Snapple Beverage has an exercise price of $30. The current stock price of Snapple Beverage is $34.25. The put option price is $7.75.

How is that going to feed into your plan for success : What did you learn about yourself through the assessments? How is that going to feed into your plan for success?

Most common combined options trading strategies : Straddles and spreads are the most common combined options trading strategies. Explain and diagram a bull spread- when would you use this strategy?

Determining annualized holding period return : You purchased 300 shares of General Electric stock at a price of $71.09 four years ago. You sold all stocks today for $64.62. During that period the stock paid.

The expectations hypothesis and normal backwardization : Differentiate between the expectations hypothesis, normal backwardization, contango and modern portfolio theory.

User Account

All Pages