CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

A put option has a strike of $100, its premium is $7, and the stock is at $100. What is the intrinsic value?
A. -$7
B. $0
C. $7

User Contributed Comments 4

User Comment
0is4eva P(T) = Max(0,X-S(T))
andy4cfa pay attention: intrinsic value does NOT include the premium ($7)
Criticull Thank you for this, I would have included the premium otherwise.
boddunah option premium = intrinsic value + time value.
exercise price and underlying price is the same so there is no intrinsic value . $7 is time value.
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