Given the following information,
finish the following sentences.
a.The intrinsic value of the call is _________.
b.The intrinsic value of the put is _________.
c.The time premium paid for the call is _________.
d.The time premium paid for the put is _________.
At the expiration of the options (i.e.,after six months have lapsed),the price of the stock is $45.
e.The profit (loss)from buying the call is _______.
f.The profit (loss)from writing the call covered (i.e.,buying the stock and selling the call)is ________.
g.The profit (loss)from buying the put is _______.
h.The profit (loss)from selling the stock short is ______.
i.The maximum possible loss from buying the put is ______.
j.At expiration,the time premium paid for a put or a call is _______.
Correct Answer:
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b.$40 - $39 = $1
c.$8 -...
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