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.

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Definitions:

Assignee

The party to whom rights or interests are transferred by another, often used in context of contracts, leases, or other agreements.

American Rule

A legal principle stating that each party in a lawsuit is responsible for paying its own attorney fees, except as otherwise provided by statute or contract.

English Rule

A legal principle where the losing party in litigation is required to pay the legal costs of the winning party.

Obligor

A party that is bound by a legal obligation to another, known as the obligee.