You have written a call option on walmart common stock. the option has an exercise price of $ 74, and walmart’s stock currently trades at $ 72. the option premium is $ 1.25 per contract. a. how much of the option premium is due to intrinsic value versus time value? b. what is your net profit if walmart’s stock price decreases to $ 70 and stays there until the option expires? c. what is your net profit on the option if walmart’s stock price increases to $ 80 at expiration of the option and the option holder exercises the option?

a. $1.25 per contract

b. $1.25 per share

c. - $4.75 per share

Explanation:

a. If we compare the intrinsic value versus time value, the option premium would be the same i.e $1.25 per contract.

b. If the stock price decreases to $70 and it stays till the option expires, the net profit would be $1.25 per share because it is less than the exercise price.

c. If the stock price increase to $80 which is more than the exercise price.So, the net profit would be - $4.75 ($74 - $80 + $1.25).

the correct answer would be b, when, queen, calder hall and london.

explanation:

we always capitalize words when a paragraph or sentence is starting, when an important name is used, when a place is being written, or simply when a noun is used, etc. so in this sentence, sentence is starting from 'when', so it will be written in capital letters. secondly, queen is considered to be an important person, so it will also be written in capital letter. next, the name of the town is mentioned, i-e calder hall, which will also be written in capital letters. in the last,   city name is being used, 'london', which will also be written in capital letters. so option b is the most appropriate one.

i would say their habit of breaking down.