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mr_godi [17]
3 years ago
15

A stock is currently selling for $75 per share. You could purchase a call with a strike price of $73 for $4. You could purchase

a put with a strike price of $73 for $2. Calculate the intrinsic value of the call option.
Business
1 answer:
Andrew [12]3 years ago
4 0

Answer:

$2

Explanation:

Th intrinsic value of an option is the difference difference between the current stock price and the strike price. That is,

Intrinsic value = Current stock price - Strike price

For the call option in the question, its intrinsic values can be calculated as follows:

Intrinsic value = $75 - $73 = $2

Therefore, intrinsic value of the call option is $2.

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