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) at the money and in the money.
E) at the money or out of the money.

Question

Quizplus · Accepted Answer

A call option has an intrinsic value of zero if the strike price is equal to the market price (at the money) or if the strike price is higher than the market price (out of the money), as there would be no benefit to exercising the option in these scenarios.

A Call Option Has an Intrinsic Value of Zero If