intrinsic value
intrinsic value questions and answers
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Q: Question about intrinsic value?
What is intrinsic value? How is intrinsic value used to make investment decisions? What are the key factors impacting intrinsic value?
A: The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. This value may or may not be the same as the current market value. Value investors use a variety of analytical techniques in order to estimate the intrinsic value of securities in hopes of finding investments where the true value of the investment exceeds its current market value.
For call options, this is the difference between the underlying stock's price and the strike price. For put options, it is the difference between the strike price and the underlying stock's price. In the case of both puts and calls, if the respective difference value is negative, the instrinsic value is given as zero.
An option is said to have intrinsic value if the option is in-the-money. When out-of-the-money, its intrinsic value is zero.
The intrinsic value for an in-the-money option is calculated as the absolute value of the difference between the current price (S) of the underlying and the strike price (K) of the option, floored to zero.
IV = max{0, | S − K | }
More specifically, for a call option
IVcall = max{0,S − K}
while for a put option
IVput = max{0,K − S}
For example, if the strike price for a call option is USD 1 and the price of the underlying is USD 1.20, then the option has an intrinsic value of USD 0.20.
Q: Under what circumstances can the market value and intrinsic value of a financialasset differ?
A: Efficient market theory holds that market prices reflect the knowledge and expectations of all investors. Thus, the price for which a financial asset should sell in the marketshould be the same as its actual price. In market equilibrium, financial assets would beproperly valued, not undervalued or overvalued. In less than perfectly efficient markets,market value and intrinsic value may differ
Q: Under fundamental analysis, a security is considered attractive for purchase if its computed intrinsic value i
a. less than its current price.
b. greater than its current price.
c. less than its book value.
d. greater than its book value.
Please help!
A: "B" should be right.
Q: what is the intrinsic value for Sears Holding?
Is it worth buying at current prices?
A: The current value of the stock is due to the company buying back a large majority of shares (I think it was something like $50 million shares??).......I would be leary of buying it now at such a high cost, especially with the holiday season coming around who knows how sales are going to be.
Q: What's the opposite of "market value", like the product/element's intrinsic, original value? (book value?)?
Like when the product isn't affected by market demands and consumer perks, similar to the gold people buy in economically difficult times because they have high intrinsic/original value. What's the proper name for that?
A: intrinsic is probably best choice
Book is more for accounting and paper (bond) transactions
"Opposite" is not he way to describe it though
Q: what is the difference between inherent value and intrinsic value?
eg. in terms of the environment
A: Nothing. They mean exactly the same thing.
Inherent: existing as an inseparable part; intrinsic.
Intrinsic: of or relating to the essential nature of a thing; inherent.
In terms of the environment they both mean of value in and of themselves; of no 'actual' value to anybody.
Q: What is the intrinsic value (not the nominal value) of a penny?
How much is the metal in a penny worth (let that be either one US cent or one UK penny)?
A: Pennies today are copper-plated Zinc (i.e. 97.5% zinc and 2.5% copper) and, according to the US Mint 2005 Annual Report, each penny weighs 2.5 grams and costs roughly 0.93 cents to make. Needless to say, one cannot simply define the "intrinsic" value of the penny by the value of the metal weight, since that would ignore the government's production and distribution costs, etc.
For more see:
http://www.usmint.gov/faqs/index.cfm?action=FAQSearchResult
Q: what is the intrinsic value and market value of shares and how are they determined?
A: Intristic Value means monetary value for acquiring it and you have to calculate yourself as monies was paid by you.
Market Value is the value of that particular share at which the trading is effected. Almost all national and leading regional newspapers carries the market value of previous day. Or you can know it instantly on TV during business hours (10 am to onwards). Many channels are airing the prevailing rates at Mumbai Stock Exchange.
Q: How accurate is this website, regarding the intrinsic value of a stock?
http://www.grahaminvestor.com/articles/finding-undervalued-stocks-intrinsic-value
A: That is chapter 10 from the "Intelligent Investor" by the main man Benjamin Graham. It is a great way to value stocks.
Q: If a Federal Reserve Note is created out of thin air does it have an intrinsic value?
A: It's value is no different then any form of money, including gold and silver. Money is only as valuable as we believe it to be. Want proof? Go take a 1 oz pure silver coin into a gas station and ask them to give you 2 gallons of gas. They won't do it, because the clerk won't recognize silver as being money.
In this case Federal Reserve Notes are backed by the "full faith and credit" of the US government and loosely based on the strength of our economy.
Q: Can you be prosecuted for stealing a dead body seen as it has no intrinsic value?
A: Yes, you can. It's also a public health hazard. It's also morally wrong.
To some labs, the body does have intrinsic value (bones for instance). Or for scientific uses.
I hope that's a rhetorical question that you asked.
Q: What does intrinsic value of a share mean?What is the issue price of a share?
A: you betcha!
Q: Philosphy question Help! intrinsic,instrumental, expressive value?
In a philosophical term can some explain or give me an example of Intrinsic value(non instrumental) and instrumental and expressive value?? Greatly appreciated!
A: intrinsic value just means that something is valuable in and of itself. in other words, even if there were no humans to value some item X, X would remain valuable. Nietzsche did not believe ANYTHING had intrinsic value because value is a human construction.
instrumental value just means that something is useful. a hammer, for example, does not have worth in and of itself. rather, it is valuable only as a MEANS to accomplishing something else.
expressive value...uh....i am not quite sure! i have not come across this. i suppose it could be something like aesthetic value, such as a painting. but i am not sure on this one. sorry.
Q: Do all atheists believe that life is without meaning, purpose or intrinsic value, just an accident?
following up from necromans question
A: Yep. Me included and I would not class myself as an atheist as such. We are left with impeccability as we have little choice with our physical existence as it is. Our inherent senses are not adequate once being asleep becomes the norm.
Most people spend their waking hours busy somewhere other than in the now. We slowly but surly learn to switch our conscious awareness off until be become automated zombies. Suddenly waking up at retirement only to find their pension will cover food or bills, but not both. A huge number of people die about 18 months to 5 years after retiring because now they have woken up.
That's what you get for being a slave to a disposable life style, or a building, a career, or any kind of self inflicted slavery. The people who get the most out of all aspects of their life are doing so because it is their vocation. They never retire until they day they drop dead and they usually live for a lot longer and lead very active, interesting lives.
The tricky part is finding your vocation for you to be impeccable with.
:)
Q: INTRINSIC VALUE?! ....in metaphysics?
Hi can someone define the term intrinsic value for me and maybe give me and example? Thanx!
A: The idea that nature has intrinsic value is so controversial because the very idea of intrinsic value is controversial both politically and philosophically. This is one of the great chasms of philosophy into which green thinkers must throw themselves so as to assess the philosophical claim of intrinsic value if they want to employ it as a bridge on which to structure an ethics or ideology. If this controversy is not taken seriously greens will be in danger of acting in unethical ways or open to attack by groups sceptical about this notion. The notion of value is problematic in three different ways, whether value can be understood as a property (x has value), whether it is objective (or intrinsic) or subjective (or extrinsic) and how one can say what is valuable (evaluations). It is evident that intrinsic value cannot be measured as a property of nature. There is no empirical method to do this. To hold this notion, one must have some form of special awareness or explanation beyond the empirical. This problem is related to the issue as to whether value resides in the object (nature) or the subject (people) which is this essays main concern. With regards to what is valuable, things have value within the structure of people’s lives. This is not subjectivity because it could be an objective truth that something is valuable in a persons life. Philosophers have struggled with what the idea of intrinsic (or objective) value suggests, to avoid problems inherent in the subjective position (namely, relativism) and to provide a firm, moral foundation. Though I have the choice to describe the objectivist position as one side of the debate, I think it would be more interesting to elaborate the subjectivist position as a critique of the idea; but for reasons of space I cannot undertake both tasks.