You are currently holding a call option on a stock with an exercise price of $80.If the current stock price is $60, your net proceeds by exercising this option will be:
A)($20)
B)$0
C)$20
D)$60 Proceeds = Stock price - Exercise price

Question

Quizplus · Accepted Answer

The net proceeds from exercising a call option is calculated as the stock price minus the exercise price. Since the current stock price ($60) is less than the exercise price ($80), exercising the option would result in a loss of $20, hence the net proceeds would be negative $20.

You Are Currently Holding a Call Option on a Stock