A Call option with a strike price of $15 when the underlying share price is $18 is selling for a premium of $3.25. What is the option’s time value?
1. Assume that the risk-free rate is 4% and the expected market risk premium is 9%. You are considering buying a share of Company B at a price of $72. Company B has a beta of 1.2 and is expected to pay a dividend of $2 per share next year. You expect to be able […]