Questions (A20-A23) are based on the information that follows. Carbax Corp. stock trades (S) at...
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Questions (A20-A23) are based on the information that follows. Carbax Corp. stock trades (S) at $75 per share. Possible year end values are Spr=$48 and SUT =$118; r =.08. T = 1 year from now =time to maturity. Call and put options with the same strike price and expiration dates are available. The quoted option prices are given below. Strike Price Per Share Put Cost Per Share Call Cost $78 $17.54 A21. Given the quoted option premiums above, what should be the time value (approximate) of the call option, on a per share basis? (a) $20.54 (b) $0.00 (c) $17.54 (d) $14.54 (e) $.51
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