The intrinsic value of an option:
A)Is the amount the investor believes the option will be worth on the expiration date.
B)Is the amount the option is worth if it is exercised immediately.
C)Is equal to price of the underlying asset.
D)Cannot be determined without knowing the future price of the underlying asset.

Question

Quizplus · Accepted Answer

The intrinsic value of an option is the amount it would be worth if it were exercised immediately, which is the difference between the current price of the underlying asset and the option's strike price, for in-the-money options.

The Intrinsic Value of an Option