Register
John purchases a call option with a strike price of $110 that is selling for $3.50 when the stock is trading at $108 per share. what is the intrinsic value of the call option
101k views
1 vote
John purchases a call option with a strike price of $110 that is selling for $3.50 when the stock is trading at $108 per share. what is the intrinsic value of the call option

User MMiroslav
by
4.9k points

1 Answer

6 votes
The intrinsic value of a call option can be calculated by subtracting the strike price from the market price ($108-$110=?). Therefore the intrinsic value of John's call option is $-2 or 0.
User Yogesh Rathi
by
6.5k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

6.2m questions

8.2m answers

Other Questions

Why do objects used as money need to be in limited supply
When a producer owns an intermediary at the next level down in the marketing channel, it is referred to as _________. a. forward integration b. backward integration c. vertical channel connection d. horizontal
Which organizational behavior perspective discusses inputs, outputs, and feedback? A. Organizational learning B. Open systems C. Multidisciplinary D. Systematic research E. Intellectual capital
Which of the following is not how a pro forma financial statement is used A. to analyze the effects of the firms forecasts on its financial performance B. to determine the amount of money needed for a
For Frank’s Funky Sounds, straight-line depreciation on the trucks is a a. variable cost. b. fixed cost. c. mixed cost. d. high-low cost.
Link Copied!