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You are given the following information concerning options on a particular stock:    Stock price = $76 Exercise price = $75 Risk-free rate = 6% per...

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Finance

You are given the following information concerning options on aparticular stock:

  

Stock price=$76
Exercise price=$75
Risk-free rate=6% per year, compounded continuously
Maturity=6 months
Standard deviation=31% per year

  

a.

What is the intrinsic value of each option? (Leave nocells blank - be certain to enter "0" wherever required. Do notround intermediate calculations.)

   

Value
  Call option$   
  Put option$   

  

b.

What is the time value of each option? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)

  

Value
  Call option$   
  Put option$   

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Transcribed Image Text

You are given the following information concerning options on aparticular stock:  Stock price=$76Exercise price=$75Risk-free rate=6% per year, compounded continuouslyMaturity=6 monthsStandard deviation=31% per year  a.What is the intrinsic value of each option? (Leave nocells blank - be certain to enter "0" wherever required. Do notround intermediate calculations.)   Value  Call option$     Put option$     b.What is the time value of each option? (Do not roundintermediate calculations and round your answers to 2 decimalplaces, e.g., 32.16.)  Value  Call option$     Put option$   

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