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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Definitions:

Endothelium

A thin layer of cells lining the blood and lymphatic vessels, heart, and some other body cavities.

Tunica Intima

The innermost layer of a blood vessel, composed of endothelial cells, providing a smooth lining for blood flow.

Artery Wall

The layered structure of an artery, composed of an inner endothelium, a middle muscular layer, and an outer connective tissue.

Vasa Vasorum

Small vessels distributed to the outer and middle coats of larger blood vessels.