The intrinsic value of an option to buy stock (i.e., a call option)is the difference between the price of the stock and the per share exercise price of the option.

Question

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The intrinsic value of a call option is calculated by taking the difference between the current price of the stock and the strike price of the option, but only when the stock price is above the strike price. If the stock price is below the strike price, the intrinsic value is considered to be zero, as the option would not be exercised profitably.

The Intrinsic Value of an Option to Buy Stock (I