Call Options: Exercise Value and Premium
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A call option on company A stock has a market price of $7. The stock sells for $30 dollars a share, and the option has an exercise price of $25 a share.
1) What is the exercise value of the call option?
2) What is the premium on the option?
Please show calculations.
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Solution Summary
This solution provides guidelines on finding the exercise value and premium of a call option.
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Here is what you need to know about Call Options:
The buyer anticipates that the price will increase and will pay a premium that will never be ...
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