SIE practice questionmediumOptions Intrinsic Value
A call option has an exercise price of $50, and the underlying stock is trading at $54. What is the intrinsic value of the call?
- A$4 per share✓ Correct answer
- B$50 per share
- C$54 per share
- D$0 per share
Explanation
Why A — $4 per share
Intrinsic value is stock price minus strike price: $54 - $50 = $4. The other values are incorrect calculations.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Options questions
- If a put option is 'at the money,' what is its intrinsic value?
- Which of the following is a prohibited options practice?
- A representative recommends frequent buying and selling of options to generate commission revenue, regardless of client…
- A customer in an options account writes a covered call. What must the customer own?
- A broker-dealer purchases shares of a stock in the open market and simultaneously recommends clients buy calls on the…
- Which statement is TRUE regarding time value in an investor’s options account?
- A registered representative sells out-of-the-money call options on a company after overhearing executives discuss a…
- Before a customer can trade options in an account, which document must they receive and acknowledge?