SIE practice questioneasyIntrinsic value
A call option with a $50 strike price and the underlying stock at $55 has what intrinsic value per share?
- A$0
- B$50
- C$5✓ Correct answer
- D$55
Explanation
Why C — $5
The intrinsic value of a call option is the underlying stock price minus the strike price when the stock is above the strike: $55 - $50 = $5 per share.
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