Q567
Price of underlying asset is added into intrinsic value of option to calculate
A.
forward price of option
B.
exercise price of option
AnswerC.
book value of option
D.
spot price of option
Answer: Option B
Solution
Answer: Option B
Solution:
Price of underlying asset is added into intrinsic value of option to calculate exercise price of option. The strike price (or exercise price) of an option is the fixed price at which the owner of the option can buy (in the case of a call), or sell (in the case of a put), the underlying security or commodity.