The intrinsic value of an at-the-money call option is equal to
A)the call premium.
B)zero.
C)the stock price plus the exercise price.
D)the striking price.

Question

Quizplus · Accepted Answer

The intrinsic value of an at-the-money call option is zero because the stock price and the exercise price are the same. The option has no profit or loss at expiration. The only value it has is time value, which is determined by the volatility of the underlying stock and the time remaining until expiration.

The Intrinsic Value of an At-The-Money Call Option Is Equal