Question

A 45 call option on a stock priced at $48.59 is priced at $8.24. This call...

A 45 call option on a stock priced at $48.59 is priced at $8.24.

This call has an intrinsic value of ______. (Round answer to 2 decimal places, do not round intermediate calculations)

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Answer #1

Intrinsic value of a call option = Price of Underlying Asset - Strike Price

Price of Underlying asset = $48.59

Strike price = $45

Intrinsic value of a call option = $48.59 - $45

Intrinsic value of a call option = $3.59

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