The Fair Market Value of a Near-Month Call Option with a Strike

question 49

Multiple Choice

The fair market value of a near-month call option with a strike price of $45 is $5, when the stock is trading at $48.
-Based on the preceding information, which of the following is true of the intrinsic and time values associated with this option.

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Registration Statement

A set of documents submitted to a regulatory authority, detailing the specifics of a security offering to the public.

Prospectus

An official document that a company files with the SEC that provides details about an investment offering for sale to the public.

Short-Swing Profits

Profits earned by corporate insiders through buying and selling their own company's stock within a short period, which are subject to regulatory scrutiny and specific rules.

Statutory Insider

An individual or entity that is considered an insider for legal or regulatory purposes, often due to their position or relationship with the entity, subject to specific transaction and reporting requirements.