What is an option? A call option? A put option?
Define a call option’s exercise value. Why is the actual market price
of a call option usually above its exercise value?
What are some factors that affect a call option’s value?
Underwater Technology stock is currently trading at $30 a share. A
call option on the stock with a $25 strike price currently sells for $12.
What are the exercise value and the premium of the call option?
