What Are the Intrinsic Values and Time Premiums of the Following

question 44

Essay

What are the intrinsic values and time premiums of the following call options if the price of the underlying stock is $35? What are the profits and losses to the buyers and the writers if the stock sells for $31 at the options' expiration?

           Strike Price         Price of the Option
             $30                          $7.50
             $35                         $3.00

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Definitions:

Telomerase

An enzyme that adds DNA sequence repeats to the ends of DNA strands in the telomere regions, which are found at the ends of eukaryotic chromosomes. This activity can preserve the length of chromosomes and has implications in aging and cancer.

Lengthened

Describes something that has been made longer in duration or size.

Telomere

A region of repetitive nucleotide sequences at the end of a chromosome, which protects the end of the chromosome from deterioration.

Guanine-rich DNA

Sections of DNA sequences that are high in guanine content, often playing crucial roles in forming G-quadruplex structures with implications in regulation and stability of the genome.