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:

Minimum Amount

The smallest quantity or value permissible, often used in the context of financial transactions or requirements.

Fixed Expenses

Costs that do not change in total regardless of changes in the level of activity or volume, such as rent and insurance premiums.

Net Operating Income

A profitability metric that calculates a company's potential income by subtracting operating expenses from revenue, excluding taxes and interest.

Sugar Beets

A root vegetable that is primarily cultivated for sugar production.