An American-style call option with six months to maturity has a strike price of $35. The underlying stock now sells for $43. The call premium is $12. What is the intrinsic value of the call

Respuesta :

Answer:

$8

Explanation:

An American style call option has a strike price of $35

The underlying stock now sells for $43 in the market

The call premium is $12

Therefore, the intrisic value of the call can be calculated as follows

Intrisic value= Market price - strike price

= $43-$35

= $8

Hence the intrinsic value of the call is $8