What is the intrinsic value of option-what is the time value

Assignment Help Financial Management

Reference no: EM132058992

1. Consider a put option trading at $4.10 expiring next week. The exercise price of this option is $35 while the underlying stock is currently trading at $38. What is the intrinsic value of this option? What is the time value?

2. Consider a call option with an exercise price of $35 trading at $10. You notice that shares of the underlying stock are trading at $50. What is wrong here? How would you take advantage of this mispricing if the option expires today?

Reference no: EM132058992

Questions Cloud

Why the example fits your definition type of causality : Post two example claims of at least two types of causality and label them appropriately.

What is current value of her winnings : Rita Gonzales won the $80 million lottery. The discount rate is 12 percent. What is the current value of her winnings?

Describe who you think little caesars target market is : Using pivot tables, compare the demographics, attitudes, and spending data across the different segment groups you created for exercise 8.

Should higher education be classified as a natural monopoly : Most European countries have nationalized their universities and colleges. Consider that some countries have also used the law to ban private colleges.

What is the intrinsic value of option-what is the time value : Consider a put option trading at $4.10 expiring next week. What is the intrinsic value of this option? What is the time value?

What happens to the errors when the regression line is fit : This question is a general question not related to any particular data. What happens to the errors when the regression line is fit on curving data?

How can they potentially impact the project : Describe at least 5 specific risks that can occur in your project. How can they potentially impact the project?

What percentage of hypertension at age 50 : What percentage of hypertension at age 50 is attributable to the weight gain from age 18 to 50?

How many ways can 14 entrees be randomly : In how many ways can 14 entrees be randomly selected out of the 21 meat and poultry offerings?

User Account

All Pages