Calculate the Intrinsic Value and Time Value of a Put

question 13

Multiple Choice

Calculate the intrinsic value and time value of a put option for which the share price is $19, the strike price is $17.50 and the option price is $0.20.

• A)$0, $0.20
• B)$0, $1.30
• C)$0.20, $0
• D)$1.50, $1.30
• E)$1.30, $1.50

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Definitions:

Non-merchants

Individuals or entities engaged in transactions who do not regularly deal in goods of the kind sold, thus not considered a merchant under the Uniform Commercial Code.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions between states, ensuring consistency and predictability in business dealings.

Good Faith

Acting with honesty and integrity in dealings without any intent to defraud or seek an unfair advantage.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, aiming to standardize and simplify the laws across states.