A stock is currently selling for $70 per share.What is the lower limit on the value of a call option with an exercise of $90?
A) −$20
B) $0
C) $10
D) $20

Name: A stock is currently selling for $70 per share.What is the lower limit on the value of a call option with an exercise of $90? 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