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zalisa [80]
3 years ago
14

John purchases a call option with a strike price of $110 that is selling for $3.50 when the stock is trading at $108 per share.

what is the intrinsic value of the call option
Business
1 answer:
andreev551 [17]3 years ago
3 0
The intrinsic value of a call option can be calculated by subtracting the strike price from the market price ($108-$110=?). Therefore the intrinsic value of John's call option is $-2 or 0.
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2 years ago
You currently have $4,400 (Present Value) in an account that has an interest rate of 8% per year compounded annually (1 times pe
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Answer:

It will take 6 whole years to be able to withdraw all the money

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To calculate the number of years it will take for the present value in your account to reach the future value we can adopt the expression below;

FV = PV (1 + r/n)^(nt)

where;

FV = the future value of the initial investment

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r = the annual interest rate

n = the number of times that interest is compounded per unit t

t = the time the money is invested for

In our case;

FV=$6,600

PV=$4,400

r=8/100=0.08

n=interest is compounded annually which is once a year=1

t=unknown

Replacing values in the formula;

6,600=4,400(1+0.08/1)^(1×t)

6,600=4,400(1+0.08)^t

6,600=4,400(1.08)^t

1.08^t=6,600/4,400

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It will take 6 whole years to be able to withdraw all the money

3 0
3 years ago
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