You are given the following information concerning options on a particular stock:
Stock price = $59
Exercise price = $55
Risk-free rate = 4% per year, compounded continuously
Maturity = 3 months
Standard deviation = 48% 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.)
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.)