Multiple Choice
The stock price is $34. The strike price of a three-month European call option is $32. If the call option is priced at $5, and the risk-free rate of interest is 2%, and the stock pays a dividend of $1 in one month, then the time value of the option is
A) 1.16
B) 2.16
C) 3.16
D) 4.16
Correct Answer:
Verified
Correct Answer:
Verified
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