Which of the Following Best Defines Intrinsic Value

question 143

Multiple Choice

Which of the following best defines intrinsic value?

• A) The lower bound of an option's value, or what the option would be worth if it were about to expire.
• B) A contract that gives its owner the right to buy or sell some asset at a fixed price on or before a given date.
• C) The value of a convertible bond if it could not be converted into common stock.
• D) The right to sell an asset at a fixed price during a particular period of time. The opposite of a call option.
• E) An option with payoffs in real goods.

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Definitions:

Franchiser

The company that sells a franchise.