A Stock Has a Market Value of $34

question 79

Multiple Choice

A stock has a market value of $34.50 a share.The $35 call option is priced at $1.10.The intrinsic value of this option is ____ and the time value is ______.

• A)$0;$1.10
• B)$1.10;$0
• C)$.50;$.65
• D)$.65;$.50
• E)$1.60;-$.50

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Definitions:

CPI

Consumer Price Index, a measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, as an indicator of inflation or deflation.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to calculate real GDP.

New Goods

Products that have been recently introduced to the market, offering novel features or technologies.

Consumer Spending

The total value of goods and services purchased by households over a period of time, contributing to the overall economic activity.