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​What Are the Following Call Options' Intrinsic Values and Time

question 25

Essay

​What are the following call options' intrinsic values and time premiums if the price of the underlying stock is $55?  Option strike price  Price of the call  Call at $50$7.00 Call at $553.00 Call at $600.50\begin{array} { r c } \text { Option strike price } & \text { Price of the call } \\\text { Call at } \$ 50 & \$ 7.00 \\\text { Call at } \$ 55 & 3.00 \\\text { Call at } \$ 60 & 0.50\end{array}


Definitions:

Wage

A fixed regular payment, typically paid on a daily or weekly basis, made by an employer to an employee, especially to manual or unskilled workers.

Rental Rate

The cost associated with leasing a particular commodity, property, or piece of equipment per unit time.

Marginal Product

The extra production resulting from the increase of a particular input by one unit, assuming all other factors remain constant.

Output

The total amount of goods or services produced by a company, industry, or country within a specific period.

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