The value of the time premium is $100.
According to the statement
we have to find the time premium from the given information.
So, For this purpose, the given information is:
a strike price of $25 when the option price is $2 and the underlying common stock sells for $24
And
Time premium is the amount by which an option price exceeds its intrinsic value. The value of an option beyond its current exercise value representing the option holder's control until expiration, the risk of the underlying asset, and the risk less return.
So, From the given information and the formula
The value of the time premium is $100.
So, The value of the time premium is $100.
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