Mathematics · Financial Derivatives
A Call Option for an index is currently at 20000 points. The Strike Price is 20200, the premium is 150 rupees, and the contract lot size is 50. Calculate the initial Intrinsic Value and Time Value of the option. Also, calculate the net profit or loss for the buyer if the index expires at 20500.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Intrinsic Value: 0, Time Value: 150 rupees, Net Profit: 7500 rupees.✓
- 2Intrinsic Value: 200, Time Value: -50 rupees, Net Loss: 2500 rupees.
- 3Intrinsic Value: 0, Time Value: 150 rupees, Net Profit: 15000 rupees.
- 4Intrinsic Value: 300, Time Value: 150 rupees, Net Loss: 5000 rupees.
Correct answer
Intrinsic Value: 0, Time Value: 150 rupees, Net Profit: 7500 rupees.
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