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3 February, 14:12

A call option with a strike price of $70 on a stock selling at $85 costs $16.8. what are the call option's intrinsic and time values? (round your answers to 2 decimal places.) intrinsic value $ time value $

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  1. 3 February, 14:18
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    Intrinsic value of a call option is the difference between underlying stock's price and its strike price, here it is = 85 - 70 = $15 Time value of this call option will be = cost of option - intrinsic value = 16.8 - 15 = $1.8 So, intrinsic value = $15.00 and time value = $1.80
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