A stock is currently selling for $22.00 per share. Ignoring interest, determine the intrinsic value of a call option should there exist equally probable stock prices of $25.00 and $23.00.
(a) $0.00
(b) $1.00
(c) $2.00
(d) $3.00
Answer: C
A stock is currently selling for $22.00 per share. Ignoring interest, determine the intrinsic value of a call option should there exist equally probable stock prices of $25.00 and $23.00.
(a) $0.00
(b) $1.00
(c) $2.00
(d) $3.00