Which of the Following Statements Is True of Intrinsic Value

question 15

Multiple Choice

Which of the following statements is true of intrinsic value of options?

• A) When the option strike price is more than the spot rate, the intrinsic value is zero.
• B) When the option strike price is equal to the spot rate, the intrinsic value is positive.
• C) When the option strike price is less than the spot rate, the intrinsic value is zero.
• D) When the option strike price is more than the spot rate, the intrinsic value is negative.

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Definitions:

Actual Authority

The express and implied powers a principal intentionally grants to an agent, allowing them to act on the principal's behalf.

Duty of Loyalty

A legal obligation of individuals, such as directors of a company or trustees, to act in the best interests of the company or trust, over and above their own interests.

Personal Concerns

Matters or issues that are primarily related to an individual's private interests, well-being, or personal circumstances.

Agent

A person or entity legally authorized to act on behalf of another person or entity in financial or business matters.