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Intrinsic value and time value of option

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Reference no: EM131106536

The price of Stock ABC is currently $50. A call option on 1000 shares of Stock ABC has an exercise price of $49 and the call premium is $3.

a. Is the option currently 'in' or 'out' of the money?

b. What is the intrinsic value and the time value of the option?

c. What is the break-even future stock price associated with the options?

d. What is the NET payoff from writing this option if the stock price at expiration is $45?

e. What is the NET payoff from buying this option if the stock price at expiration is $58?

Reference no: EM131106536

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