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.
• d) the exercise price minus the price of the underlying asset.
  No. Would be correct for a put. The intrinsic value of a call option is the profit its holder can realize by exercising it ( thus purchasing the underlying at the exercise price) and selling the underlying at its market price.

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