A stock is currently selling for $70 per share and its call option has an exercise price of $90. What is the lower limit on the value of the call option?
A) -$20
B) $0
C) $10
D)$20

Name: A stock is currently selling for $70 per share and its call option has an exercise price of $90. What is the lower limit on the value of the call option? A) -$20 B) $0 C) $10 D)$20
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Question

Quizplus · Accepted Answer

Lower limit on call = max[0,(stock price - exercise price)] = max[0,($70 - 90)] = $0

A Stock Is Currently Selling for $70 Per Share and Its