Respuesta :
A particular call is an option to buy stock at $25. The intrinsic value of the call is $1.
Option A is correct.
Evaluating the value:
Intrinsic value of the call
= 26 - 25
= $1
Value inherent in a call option:
The right to purchase an asset without the obligation to do so is known as a call option. The strike price is the price at which you agree to purchase the asset. The call option has a positive intrinsic value if the market price is higher than the strike price. An indicator of an asset's worth is its intrinsic value. A rigorous financial model or objective calculation are used to arrive at this number. An asset's intrinsic value differs from its current market price.
How significant is intrinsic value?
When compared to the stock's current market value, the intrinsic value helps determine whether the stock is a good buy or a good sale. If the stock's current market price is lower than its intrinsic value, it is considered a good investment.
Question is incomplete.Missing part is below :
A particular call is an option to buy stock at $25. it expires in six months and currently sells for $4 when the price of the stock is $26. what is the intrinsic value of the call?
A. $1
B.$4
C. $0
D. $25
Learn more about intrinsic value:
brainly.com/question/29676702
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