You are given the following information concerning options on a particular stock: Stock price = $51 Exercise price = $50 Risk-free rate = 5% per year, compounded continuously Maturity = 6 months Standard deviation = 38% per year
a. What is the intrinsic value of each option? (Leave no cells blank - be certain to enter "0" wherever required. Do not round intermediate calculations.)
Intrinsic Value Call option $
Put option $
b. What is the time value of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Time Value Call option $
Put option $
PLEASE FOLLOW INSTRUCTIONS ON ROUNDING DECIMALS,