The intrinsic value of a call option is equal to ________.
A) the stock price minus the exercise price
B) the exercise price minus the stock price
C) the stock price minus the exercise price plus any expected dividends
D) the exercise price minus the stock price plus any expected dividends

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is the difference between the current stock price and the exercise price, but only when the stock price is above the exercise price. If the stock price is below the exercise price, the intrinsic value is zero, as the option would not be exercised.

The Intrinsic Value of a Call Option Is Equal to ________