Chapter 03 · Section 3.1

The Intrinsic Value of a Call Option

The intrinsic value of a call option is equal to:

a) the price of the underlying asset.
b) the exercise price.
• c) the price of the underlying asset minus the exercise price.
  Yes. The intrinsic value of a call option is the profit the holder of the call could realize by exercising the call and selling the underlying. It is therefore equal to the market price of the underlying asset minus the exercise price. Continue
  d) the exercise price minus the price of the underlying asset.

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