Clark Company Holds Several Options: The Intrinsic Value of Clark Company's Options Is
A)-$0

question 11

Multiple Choice

Clark Company holds several options: ?
$\begin{array}{lrr}& \text { Spot Price } & \text { Strike Price } \\\text { Call option on Ionics } & \$ 29.80 & \$ 27.90 \\\text { Call option on Kimberly } & 60.41 & 64.84 \\\text { Put option on Motorola } & 14.25 & 16.40 \\\text { Put option on Nortek } & 32.10 & 32.10\end{array}$
The intrinsic value of Clark Company's options is

• A)-$0.38.
• B)-$4.05.
• C)-$4.43.
• D)-$8.48.

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Definitions:

Player B

In game theory, a participant in a strategic situation or game, distinguished from other participants by the label "B".

Sherman Antitrust Act

A landmark U.S. legislation passed in 1890 that prohibits monopolistic business practices and promotes competition.

Price Fix

A practice where businesses agree to set the price of a product or service at a certain level, often illegally, to avoid competition.

CEOs Collude

This term refers to illegal or unethical agreements between CEOs of different firms to make decisions that restrict competition, manipulate prices, or control market entry.