The intrinsic value of a call is I.the value of the call if it were to expire today.
II)equal to the lower bound of a call's value.
III)another name for the market price of a call.
IV)always equal to zero if the call is currently out of the money.

Question

Quizplus · Accepted Answer

The intrinsic value of a call option is the value it would have if it were to expire immediately (I), it represents the minimum value of the call (II), and it is indeed always equal to zero if the call is out of the money, because the stock price is below the strike price, making exercising the option worthless (IV). It is not the same as the market price of a call (III), which also includes time value and other factors.

The Intrinsic Value of a Call Is I