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What is the exercise value of the call option

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Reference no: EM132042605

A call option on Berger Quinn stock has a market price of $8.50. The stock sells for $29 a share,and the option has an exercise price of $27.50 a share.

a. What is the exercise value of the call option?

b. What is the premium on the option?

Exercise value = current stock price-exercise price

Premium = option price-exercise value

Reference no: EM132042605

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