C1 = (S1 - E) if (S1 - E) 0 identiﬁes the value of a call option at expiration.

Question

C1 = (S1 - E) if (S1 - E) > 0 identiﬁes the value of a call option at expiration.

Quizplus · Accepted Answer

This is true because C1 represents the value of a call option at expiration, and it is equal to the difference between the stock price at expiration (S1) and the strike price (E) if that difference is greater than zero. This is because a call option gives the holder the right to buy the underlying stock at the strike price, so it only has value if the stock price is higher than the strike price.

C1 = (S1 - E) If (S1 - E) >