A Stock Has a Market Value of $36

question 13

Multiple Choice

A stock has a market value of $36.10 a share.The $35 call option is priced at $1.48.The intrinsic value of this option is ________,and the time value is ________.

• A)$1.10;$.38
• B)$1.10;$1.48
• C)$0;$1.48
• D)$0;$.38
• E)$0;$1.10

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Definitions:

Bystander

A person who is present at an event or incident but does not take part.

Cognitive Dissonance

The psychological unease felt by someone who simultaneously possesses conflicting beliefs, ideas, or values.

Festinger

A psychologist known for developing the theory of cognitive dissonance, which describes the discomfort felt when holding conflicting beliefs or attitudes.

Cognitive Dissonance

A psychological discomfort experienced when holding two or more contradictory beliefs, ideals, or values.