Final answer:
The intrinsic value of the call option on Stock B is $0, as the stock's current trading price ($30) is lower than the strike price ($31.50) of the option.
Step-by-step explanation:
The intrinsic value of a call option is calculated as the difference between the current price of the underlying stock and the strike price of the option, but only when the stock price is above the strike price (the option is 'in-the-money'). If the current stock price is lower, the intrinsic value is zero, since exercising the option would not be profitable.
In this scenario, Stock B is trading at $30 and the strike price (X) of the call option is $31.50. Because the stock is trading below the strike price, the call option has no intrinsic value, as exercising it would not be beneficial; you would be paying $31.50 for something that is readily available in the market for $30.
When you talk about the intrinsic value, it refers to how much 'in-the-money' the contract is currently. For example, if you have a call Option contract with a strike price of Rs 200 on a stock that is currently priced at Rs 300, the intrinsic value of the call Option will be Rs 100 (300-200).