Chapter 03 · Section 3.1
Calls and Puts-Intrinsic Value
CALL PUT
Exercise Mar Jun Sep Mar Jun Sep
Price
30 10.15 10.85 11.65 0.05 0.35 0.85
35 5.40 6.90 8.10 0.25 1.35 2.15
40 1.90 4.00 5.35 1.75 3.40 4.35
45 0.40 2.10 3.45 5.30 6.50 7.40
50 0.05 1.05 2.15 10.05 10.50 11.15
Stock price: $40 Today's date: February
What is the intrinsic value of the option in bold (on a per share basis)?
e) $5.00
Yes. The intrinsic value of a (11,0) call option is the price of the underlying stock, $40, less the exercise price, $35. Note that the intrinsic value of a put option is the exercise price less the price of the underlying stock.Continue
a) $5.40
b) $40.00
c) $35.00
d) 0.40
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