A 4-month call has a strike price of $16. The current underlying stock price is $18.35. What is the intrinsic value of this call?
A)$0
B)$1.35
C)$1.45
D)$2.35
E)$3.35

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is calculated as the current stock price minus the strike price, provided this difference is positive. If it's negative, the intrinsic value is zero. Here, it's $18.35 - $16 = $2.35.

A 4-Month Call Has a Strike Price of $16