A 45 call option on a stock priced at $50 is priced at $8.50. This call has an intrinsic value of ______ and a time value of _____. A. $8.50; $0 B. $5.00; $3.50 C. $3.50; $5.00 D. $0; $3.50

A 45 call option on a stock priced at $50 is priced at $8.50. This call has an intrinsic value of __ and a time value of _. A. $8.50; $0 B. $5.00; $3.50 C. $3.50; $5.00 D. $0; $3.50

Fundamentals of Financial Management (MindTap Course List)

14th Edition

ISBN:9781285867977

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter18: Derivatives And Risk Management

Section18.A: Valuation Of Put Options

Problem 2P

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Question

3. A 45 call option on a stock priced at $50 is priced at $8.50. This call has an intrinsic value of ______ and a time value of _____.
A. $8.50; $0
B. $5.00; $3.50
C. $3.50; $5.00
D. $0; $3.50

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