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Suppose you purchase a call option to buy IBM common stock at $35 per share in September. The current price of IBM is 37 and the option premium is 4. What is the intrinsic value of the option? As the expiration date on the option approaches, what will happen to the size of the option premium?
Distribution
Refers to the way in which something is shared out among a group or spread over an area.
Alternative Hypothesis
The hypothesis that proposes there is a statistically significant difference between two or more sets of data, contrasting the null hypothesis.
Region of Rejection
The range of values for which the null hypothesis is rejected in favor of the alternative hypothesis in hypothesis testing.
p < .05
Indicates that the probability of the observed data occurring under the null hypothesis is less than 5%, suggesting statistical significance.
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