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Assume That a Call Option Has an Exercise Price of $1.50/£

Question 56

Multiple Choice

Assume that a call option has an exercise price of $1.50/£. At a spot price of $1.45/£, the call option has:

A) a time value of $0.04.
B) a time value of $0.00.
C) an intrinsic value of $0.00.
D) an intrinsic value of -$0.04.

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