The value of a call option at expiration will be equal to the maximum of zero or the:
A) stock price.
B) exercise price.
C) stock price minus the exercise price.
D) exercise price minus the stock price.

Question

Quizplus · Accepted Answer

At expiration, a call option's value is the maximum of zero or the difference between the stock price and the exercise price, as the option is only valuable if the stock price exceeds the exercise price.

The Value of a Call Option at Expiration Will Be