Question

On January 2, 2020, Nash Company purchases a call option for $290 on Merchant common stock. The call option gives Nash the option to buy 1,050 shares of Merchant at a strike price of $51 per share. The market price of a Merchant share is $51 on January 2, 2020 (the intrinsic value is therefore $0). On March 31, 2020, the market price for Merchant stock is $54 per share, and the time value of the option is $210.

Answer 1

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Explanation:

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