A Call Option Has an Intrinsic Value of Zero If

question 50

Multiple Choice

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.

---

Definitions:

Many Buyers

A market condition where there are numerous consumers for a product, enhancing competition and potentially reducing prices.

Price Takers

Market participants who accept prevailing market prices and do not have the market power to influence those prices.

Competitive Market

A market structure characterized by a large number of firms competing with each other to sell similar or identical goods and services.

Perfect Competition

A market structure with many buyers and sellers, where all firms sell identical products and no single buyer or seller can influence the market price.