When a call is out of the money then its intrinsic value is equal to:
A) Zero.
B) The exercise price.
C) The stock price.
D) The difference between the exercise price and the stock price.
E) The upper bound of the call's value.

Question

Quizplus · Accepted Answer

An out-of-the-money call option means the exercise price is above the current stock price, making its intrinsic value zero since exercising it would not result in a profit.

When a Call Is Out of the Money Then Its