Calculate the value of a long call if the exercise price is $160.4, the premium is $80.2 and the spot price is $186.0.Question 4Answera.105.80b.-80.20c.-54.60d.-240.60e.-160.40
Question
Calculate the value of a long call if the exercise price is 80.2 and the spot price is $186.0.Question 4Answera.105.80b.-80.20c.-54.60d.-240.60e.-160.40
Solution
The value of a long call option can be calculated using the formula:
Value of Long Call = Spot Price - Exercise Price - Premium
Given: Exercise Price = 80.2 Spot Price = $186.0
Substitute these values into the formula:
Value of Long Call = 160.4 - 54.6
So, the value of the long call is -$54.6. Therefore, the correct answer is c. -54.60.
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