Assume That a Call Option Has an Exercise Price of $1.50/£

question 56

Multiple Choice

Assume that a call option has an exercise price of $1.50/£. At a spot price of $1.45/£, the call option has:

• A) a time value of $0.04.
• B) a time value of $0.00.
• C) an intrinsic value of $0.00.
• D) an intrinsic value of -$0.04.

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Tax Rate

The percentage at which an individual or corporation is taxed by the government on their income or assets.

Inventory

The goods and materials a business holds for the purpose of resale or production.

Intragroup Services

Services provided between companies within the same group, often related to management, support, or technical services.

NCI Adjustment

Adjustments made to reflect the share of equity interest in a subsidiary not attributable directly or indirectly to the parent company.