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What is the intrinsic value of the option

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Reference no: EM133004093

XYZ is trading at $100, a 6 month call option on XYZ struck at $90 is priced at $15. 6 month LIBOR is 3% per annum and XYZ has a 1% per annum dividend yield.

1) What is the intrinsic value of the option?

2) What is the time premium?

3) What is the gross carry of the option?

4) How much dividend income does she lose by purchasing the option rather than the stock? What is the net carry of the option?

Reference no: EM133004093

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