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

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Definitions:

Deferred Tax Assets

Financial assets that reduce future tax liability due to temporary differences between the ledger and tax basis of assets and liabilities, or the carryover of unused tax credits/deductions.

Income Tax Expense

The cost to a company for its taxable income, comprising current tax liabilities and deferred tax movements.

Service Revenue

Income earned from the provision of services to customers or clients.

Deferred Tax Asset

An accounting term representing taxes paid or carried forward but not yet recognized in the income statement.