What will happen to the value of the call

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1. Paypal (PYPL) stock is trading for $111.96/share. The June call options have 47 days to maturity and the 105 strike calls are trading for $8.60. Based on this information provide the following:

Intrinsic Value = _______________________________

Extrinsic Value = _______________________________

Intrinsic Breakeven = ____________________________

Apply the concept of convergence to describe what will happen to the value of the call over the next 47 days and the corresponding effect on the values provided above. (NOTE: The key concepts here are the variables C, IV, and EV.)

Reference no: EM132516485

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