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:

Household Spending

The total expenditure by household consumers on goods and services, excluding savings and loan repayments.

Past Ten Years

The time period stretching back from the current date to a decade ago.

Services

Intangible products that cannot be stored, touched, or seen and are consumed at the point of delivery, such as healthcare, education, and financial advising.

Present Value

The present value of a future amount of money or series of cash flows, considering a certain interest rate.