SIE practice questionhardOptions
Which term describes the amount by which an option is in-the-money?
- AIntrinsic value✓ Correct answer
- BTime value
- CPremium
- DStrike price
Explanation
Why A — Intrinsic value
Intrinsic value is how much an option is in-the-money. Time value is extra premium, premium is the total cost, and strike is the contract price.
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