The Intrinsic Value of an Option Is the Value It

question 10

Multiple Choice

The intrinsic value of an option is the value it would have ________.

• A) if it approached to its exercise price
• B) if it approached to its strike price
• C) if it expired immediately
• D) if it approached to its fixed price

---

Definitions:

Annual Rate of Inflation

The percentage increase in the cost of goods and services over a one-year period.

Equivalent Annual Rate

The interest rate that is annualized using compounding over a given period, making it comparable across different compounding frequencies.

Rate of Production

The speed at which goods or services are produced, usually measured over a specific time period.

Plant Workers

Individuals employed in industrial or manufacturing settings, responsible for operating machinery and producing goods.