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Suppose a American 3-month call option with a strike of $10 trades for $4. The...

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Accounting

Suppose a American 3-month call option with a strike of $10 trades for $4. The underlying stock price is $ 12. The risk free rate is 4%. Compute the option's intrinsic value, pure 's time value, and time value as discussed in the video to chapter 3. What is the time value according to the textbook?

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