You have written a call option on Walmart common stock. The option has an exercise...
90.2K
Verified Solution
Link Copied!
Question
Finance
You have written a call option on Walmart common stock. The option has an exercise price of $76, and Walmarts stock currently trades at $74. The option premium is $1.35 per contract. a. How much of the option premium is due to intrinsic value versus time value? b. What is your net profit if Walmarts stock price decreases to $72 and stays there until the option expires? c. What is your net profit on the option if Walmarts stock price increases to $82 at expiration of the option and the option holder exercises the option?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
