SIE practice questionhardIntrinsic value
If the market price equals the strike price, the option’s intrinsic value is:
- A$0✓ Correct answer
- BThe premium paid
- CStrike price minus market price
- D100 shares
Explanation
Why A — $0
At-the-money options have $0 intrinsic value. Intrinsic value does not equal premium or contract size.
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