Vidyalelo
Management · Q571

International Finance and Treasury

Graduate and Post Graduate · Management · question 571

Q571

Intrinsic value of option is 280 and price of option is 350 then time value of option is

A.
$125
B.
$135.00
C.
$280
D.
$70
Answer

Answer: Option D

Solution

Answer: Option D
Solution:
Time value of option = Price of option - Intrinsic value of option
= 280 = $70.