At what point is the dollar payoff from owning a call option on a stock greater than the payoff from owning the stock itself?
A) When stock price exceeds exercise price at expiration.
B) When exercise price exceeds stock price at expiration.
C) When stock price equals exercise price at expiration.
D) Call payoff never exceeds stock payoff.

Question

Quizplus · Accepted Answer

The payoff from owning a call option is the stock price minus the exercise price, which can never exceed the stock price itself.

At What Point Is the Dollar Payoff from Owning a Call