A call option has an intrinsic value of zero if the option is
A)at the money.
B)out of the money.
C)in the money.
D)A and C.
E)A and B.

Question

Quizplus · Accepted Answer

An option is said to be at-the-money when the underlying asset's price is equal to the strike price. An option is said to be out-of-the-money when the underlying asset's price is below the strike price for a call option and above the strike price for a put option. An option is said to be in-the-money when the underlying asset's price is above the strike price for a call option and below the strike price for a put option. An option with an intrinsic value of zero means that the option is either at-the-money or out-of-the-money.

A Call Option Has an Intrinsic Value of Zero If