A call option on a stock expires in 6 months. The call price today is $15, the exercise price is $75, and the stock price today is $85. What is the "intrinsic value" and the "time value" of this call option?
Added by Shane K.
Step 1
The intrinsic value of a call option is the difference between the stock price and the exercise price. In this case, the stock price is $85 and the exercise price is $75. Therefore, the intrinsic value is: Intrinsic value = Stock price - Exercise price Show more…
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