If tcb is trading at 43 and the tcb apr 40 call is trading at 4, what are the intrinsic value and the time value of the call premium?

Answers

Intrinsic value 3; time value 1, are the intrinsic value and the time value of the call premium

The option is in the money by 3 points because the strike price is 40 and the market price is 43.

This sets a minimum premium of $3 per share. Because the actual premium is 4, the balance of 1 represents time value.

The intrinsic value measures the value of an investment based on cash flow. The market value indicates the price others are willing to pay for an asset, whereas intrinsic value indicates the value of an asset based on an analysis of its actual financial performance.

In finance, the intrinsic value of an asset usually refers to its value based on simplified assumptions. For example, the intrinsic value of an option is based on the current market value of the underlying asset, while ignoring possible future fluctuations and the time value of money.

intrinsic valueand the time value of the call premiumThe intrinsic valuemeasures the value of an investment based on cash flow. The market value indicates the price others are willing to pay for an asset, whereas intrinsic value indicates the value of an asset based on an analysis of its actual financial performance.intrinsic valueof an asset usually refers to its value based on simplified assumptions. For example, the intrinsic value of an option is based on the current market value of the underlying asset, while ignoring possible future fluctuations and the time value of money.intrinsic valuehere: https://brainly.com/question/14728234