Question

what is the intrinsic value of the following call option? s0 53.00 x 50.00 call 8.17 group of answer choices 5.17 5.60 3.00 3.12 8.17

Answer 1

The intrinsic value of a call option is calculated by subtracting the strike price from the current price of the underlying asset if the option is in-the-money. For the option with a current asset price of $53.00 and a strike price of $50.00, the intrinsic value is $3.00.

Step-by-step explanation:

The intrinsic value of a call option is the difference between the current price of the underlying asset (S0) and the strike price (X) if the option is in-the-money, meaning that the current price is above the strike price. In this scenario, the underlying asset price is S0 = $53.00, and the strike price is X = $50.00. Hence, we calculate the intrinsic value by subtracting the strike price from the current price of the underlying asset.

Intrinsic Value = S0 - X = $53.00 - $50.00 = $3.00.

So, the intrinsic value of the given call option is $3.00.