ICMA Exam FMFQ Topic 4 Question 54 Discussion

Actual exam question for ICMA's FMFQ exam

Question #: 54
Topic #: 4

You hold a call option on a stock with a strike of EUR 35. The current premium for this option is EUR 3.80 and the underlying stock is trading at EUR 32. How much of this option price represents time value?

ANone as the option is in-the-money

BEUR 3.80

CEUR 3.00

DEUR 0.80

Show Suggested Answer

Suggested Answer: B

by Darrel at Apr 25, 2024, 08:25 AM

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Anastacia

6 months ago

No, because the option is already in-the-money, so the time value is only EUR 0.80

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Larae

6 months ago

But isn't the premium EUR 3.80? Shouldn't that be the time value?

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Emogene

6 months ago

I agree with the time value is indeed EUR 0.80

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Anastacia

7 months ago

I think the time value is EUR 0.80

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Nidia

7 months ago

B) EUR 3.80

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Jamal

7 months ago

How much of this option price represents time value?

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